zlmei[at]hotmail.com (G M) writes:

- quote -

Pull out the Schedule D instructions and fill out the
"Capital Loss Carryover Worksheet". That will tell you
how much of this year's loss gets carried over to next
year. If you look at the Sched D instructions closely, you'll
see they direct you to do this in the situation you describe
(as well as in other situations).

- quote -

Fill out the loss carryover worksheet every year until
the loss is either gone or the instructions no longer
direct you to do so.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Hi:

I have a tax question (for my daughter's tax) of mutual fund loss
carrying over.

I opened a UTAH account at Vanguard for my daughter (6 yrs old now)
several years ago, invested the initial money (10K) with three funds.
In Jan. 2003, I consolidated three funds to one, basically moved the
money from two funds (Growth Index and Value Index) into the 3rd one
(500 Index Fund). So the account has a loss due to the redemption of
the two funds, the total short term loss is $25, but the long term
loss is about $2200. Other than this the account has dividends
distribution of about $100 this year.

So now comes to my questions for her tax for year 2003. Assuming there
is no other incomes and losses except UTAH,

Question 1: In her 2003 tax form, the net income would be 100 - 25 -
2200 = -2125 (net loss). Can this amount be carried over to year 2004?
Assuming if I take some money out from this account in 2004 and it
ends up with some gains, can I use this year's loss (-2125) to offset
future gains?

Question 2, If the above answer is Yes, can I do it year over year
until all the losses are "used up"? This means I am not "wasting" this
year's loss.

Thanks for your answer.

GM