Capital Gains & Losses Lawyer
Though the specifics are extremely complex, the IRS generally implements rules on capital gains and losses out of a sense of fairness. When you lose money on an investment, you may be able to apply the value to offset taxable income. In addition, some losses on capital investments may qualify for carry over to future tax years. However, this basic description of capital gains and losses does not do justice to how the complicated rules work in practice. Plus, there are limitations that you need to know to take full advantage of the benefits.
Fortunately, you can trust our team at Lehman Tax Law to ensure you reap all available benefits under IRS rules on capital gains and losses. We have in-depth knowledge of the relevant legal concepts, so you do not need to invest countless hours trying to decipher convoluted tax laws. To learn how we can help, please contact our office to speak to our capital gains & losses lawyer. Some background information can also help you understand the basics.
Leveraging Capital Gains and Losses
Any taxpayer with multiple, diverse investments will likely have both capital gains and losses during the relevant tax year. If you experience a net capital loss, in which your losses are greater than your gains, you may be able to apply that amount to future tax years. This is your capital loss carryover that you can leverage in another year to offset gains. Note that tax laws allow you to apply up to $3,000 to ordinary income; the remainder can be carried over until exhausted.
Applying Unrealized Losses for Tax Benefits: Investors can gain an edge with tax planning by taking advantage of unrealized losses within their portfolios. As the term suggests, an “unrealized” loss is one that has not yet hit your interests: The asset has decreased in value, but it does not affect your overall portfolio value until you liquidate. If and when you do realize the loss by selling, you may be eligible to apply this amount to offset capital gains and/or ordinary income.
In assessing your tax planning opportunities, always keep in mind the IRS Wash-Sale Rule. If you repurchase stock that you sold for a loss within 30 days thereafter, you cannot apply the unrealized loss value to offset capital gains and/or ordinary income. After the 30-day period, you will not incur a penalty or give up the deduction.
Special Considerations for Corporations: Under IRS rules, qualifying corporations may be able to implement carryback provisions in addition to the carryover. You may be able to apply net capital losses for the previous three years, which can have significant benefits considering the 40 percent decrease in corporate tax rates under the Tax Cuts and Jobs Act of 2017 (TCJA).
Contact a Skilled Capital Gains & Losses Lawyer Today
For additional information and technical advice on capital gains and losses rules, please contact Lehman Tax Law at 561-368-1113 or check out our firm online. We can set up a no-cost consultation with attorney Richard S. Lehman, who can review your circumstances and counsel you on your options.