Several years ago I had a large loss on an individual stock. I have been able to deduct $3000/year against ordinary income over the last several years and the loss now stands at $21000 (carryover). The vast majority of my investments are in Index funds (Thanks Bogleheads) so I declared dividends but did not generate capital gains to declare. For some reason I thought the maximum deduction for loss was $3000/year no matter what.
I have never done true tax loss harvesting and want to make sure my new understanding of how it works is correct
My situation:
I sell two individual stocks with ~$20,000 in capital gains in 2024. I can then use my $21000 loss carryover in 2024. I would have (declared 20K gain -21K loss carryover ). That loss would balance out the gain and would leave me with a $1000 loss carryover for 2025.
The money from the stock sale could then be invested in Index funds and that would not be a wash sale.
Is my understanding correct?
Thank you.
I have never done true tax loss harvesting and want to make sure my new understanding of how it works is correct
My situation:
I sell two individual stocks with ~$20,000 in capital gains in 2024. I can then use my $21000 loss carryover in 2024. I would have (declared 20K gain -21K loss carryover ). That loss would balance out the gain and would leave me with a $1000 loss carryover for 2025.
The money from the stock sale could then be invested in Index funds and that would not be a wash sale.
Is my understanding correct?
Thank you.
Statistics: Posted by Dregob — Sat Feb 03, 2024 9:37 pm — Replies 2 — Views 162