Capital Loss Deduction Planning and Wash Sale Rules

Each year you are allowed to deduct $3,000 of net capital losses against ordinary income. Any net losses in excess of $3,000 will be carried forward to offset future capital gains. If you have stocks with losses, you may want to consider selling those for the loss. However, keep in mind the "wash sale" rules. A "wash sale" occurs if a taxpayer sells stock or securities at a loss and, within 30 days before or after the sale, directly or indirectly buys or trades for substantially identical stock or securities. Call us if you have questions on these rules. Note: You should never let taxes affect good investment decisions.