Tax Write off question on home interest and stock sales?
by Mortgage Rates on Monday, November 15th, 2010 | 4 Comments
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You can use up to $3,000 in capital losses against other income. If you have that much in losses and don’t expect the stock to recover any time soon, go ahead and sell and use the loss. Whether you’ll have a gain or loss to report depends upon what you paid for the stock. If you have $2k worth of stocks at today’s price that you paid $5k for then you’ll have a $3k loss.
It would still be worth your while to itemize. You have $14,000 in itemized deductions and the Standard Deduction is only $5,450 if you’re Single or $10,900 if you’re Married Filing Jointly so it’s a win situation for you regardless of your filing status.
2 separate questions.
Itemizing. Your Interest and property taxes are $14,000. That’s more than the standard deduction ($5450 for single, $10,900 for MFJ, more if over 65 or blind), so itemizing would help a little.
Stock losses. If you sell $2000 of BOA stock, fine, but what did you pay for it? What is the loss? You can deduct up to $3000 of net losses against other income.
Youll want to itemize since the standard deduction will be lower then your itemized. As for your stock losses you are allowed to offset your losses to any gains that you report and that loss cannot exceed 3000 if its over 3000 then you are allowed to carryover the remaining loss to future years. As for if you should sell this year depends on how you forecast your future investments. If you plan on having substantial capital gains in the future then wait if not then sell now.
??? Unless you’re an older tax payer, there is really no reason for you to sell for a loss. You’ve probably already paid enough into the system if you were honest about your exemptions on your W-4 (or had them take out more), so you probably wouldn’t owe anything anyway.
You should itemize if you’ve got more than the standard deduction, which it looks like you do, which will reduce your taxable income even more.
Without knowing your exact situation, it’s difficult to say much of anything for sure, but unless you’re planning on retiring soon, hold on to that stock- it’ll bounce back, and the savings on any tax you may owe this year is not going to make up for the benefit of gain later.
Good luck! :0)