"Bruce Raskin, CPA" <Braskincpa[at]wbhsi.net> writes:
- quote -

[snip]

- quote -

My guess he's using "M" in its older accounting send of
$1,000.

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

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"dickie7" <dickie7[at]aol.com> wrote:

- quote -

Dickie:
With those kind of numbers, you should really seek out a
professional for this situation.

--
Bruce Raskin, CPA, P.C.
Braskincpa[at]wbhsi.net
Tax and accounting Services
Chandler, AZ

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"dickie7" <dickie7[at]aol.com> writes:

- quote -

What exactly is the "everything you've read"?

- quote -

I'm not surprised.

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

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"dickie7" <dickie7[at]aol.com> wrote:

- quote -

How? If line 13 of the 1040 is not -$3,000 you've made a
mistake.

- quote -

Correct. The gain gets eaten up by some of your carryover
loss. BTW, it's not "if" your declare the gain, it's "when"
you declare it. No dealer's choice.

- quote -

When you have a Schedule D net gain that much of the
carryover is used up by it no matter what else happens on
the return. You've misinterpreted something you read.

- quote -

Lines 6 and 14 come from your 2004 carryover worksheet.
Lines 7 15 and 16 are math. Since 16 is a loss, you skip 20
and put $3,000 on 21, which flows to line 13 of the 1040.

Then you go to the carryover worksheet to figure out your
carryover to 2006.

- quote -

You can't find one because there's no such waiver.

--
Phil Marti
Clarksburg, MD

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Here's a twist on the above post:
For 2005 I have schedule 1040, line 43, negatve income in
excess of $10M. Schedule "D" net short term gain of about
$5.4M(no long term). Long and short term carryforwards from
2004 of about $30M. If I declare the $5.4M gain for '05,
there will be no net tax on it. Everthing I've read to date
on similar, but not the exact, cases indicates that it is
possible to waive the entire $30M to 2006 and beyond, but
the instructions worksheet prevents this.

And I have a problem as to how to fill in schedule "D",
lines 6,7,14,15,16,20,21.

It seems there shouild be a way to document this waiver to
'06 on the '05 schedule "D".

Help!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Depending on any other relevant facts, the capital loss
should not be wasted. All $3,500 of the capital losses
should carry over to 2005; note, however, that I am basing
this on guess-work using very few facts and assuming that
the carryover worksheet for 2005 will be substantially
similar to the worksheet for 2004. For the following, I
have also assumed that all of your son's losses are
long-term - if some are short-term, the analysis should
still work conceptually, but would need to be redone.

If you work through the capital loss carryover worksheet for
2004, using it as a proxy for what the worksheet for 2005
should look like, your son will have a line 40 loss of
$3,550 - taking into account a capital loss deduction of
$3,000 on line 13 of his 2004 Form 1040. The loss from
Schedule D, line 18 for 2004 will be $3,000. Combining
these two gives me a value of $0 for line 3 of the
worksheet. This transfers to line 4 of the worksheet.

Going next to line 9 of the worksheet, I entered a value of
$3,500 ($2,300 carryover from 2003 plus an additional loss
of $1,200 for 2004 - remember, we're trying to guesstimate
what the carryover to 2005 will be). For simplicity I
entered $0 on line 10 of the worksheet, on the assumption
that your son had no short term capital gains for 2004. For
line 11 of the worksheet, I get a value of $0 (line 4 minus
line 5, or $0 minus $0). For line 12 of the worksheet,
adding lines 10 and 11, I get $0. Finally, for line 13 of
the worksheet, the long term capital loss carryover for 2005
(which is what we're trying to guesstimate), I get line 9
minus line 12 equals $3,500 - $0 = $3,500.

That should mean that, for 2005, on the facts presented, and
with some simplifying assumptions, your son will have a
long-term capital loss carryover of $3,500. That is the
same as the overall capital loss that your son has going
into 2004 ($2,300 carried over from 2003, plus $1,200
additional loss recognized in 2004).

From this it would seem to follow that, even though your son
must take the $3,000 capital loss deduction on line 13 of
his 2004 Form 1040, he will not have "wasted" his capital
losses, and should have the full amount of those losses
carried over to 2005.

Please remember, however, that you're getting "advice" for
free, and that you usually get what you pay for (i.e.,
nothing) - you should cross-check my suggestions with a CPA
to make sure that they're accurate. I also hope that if
I've gotten it wrong that someone else on this forum will
correct me, so check back and don't take my say-so as the
final word on the matter.

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"Vigo" <suerivas[at]earthlink.net> wrote:

- quote -

He must use the carryover on the return, but it sounds like
most, if not all, of it will still carry forward to 2005.
See the capital loss carryover worksheet.

--
Phil Marti
Clarksburg, MD

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Vigo wrote:

- quote -

IIRC, if taxable income would be negative, disregarding the
personal exemption and capital losses, all of the the
capital loss is carried over to the next year, even though
($3000) is reported on 1040 line 13.

If he's a dependent, I'd have to research it to determine
whether (a) taxable scholarships are considered "Earned
income" for the purpose of the dependent standard deduction
calculation, and (if so) (b) whether the dependent standard
deduction is limited to AGI. If (a) is incorrect, he would
owe taxes disregarding the capital losses, and so not all of
the capital loss could be carried over. If (b) is
incorrect, the worksheet would show no reduction in the
capital loss carryover, but the worksheet might still not
reflect the law.

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"Vigo" <suerivas[at]earthlink.net> wrote:

- quote -

When the capital loss carryover worksheet is completed you
will see that the entire capital loss carries forward to
2005.

Barney Byrd

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"Vigo" <suerivas[at]earthlink.net> wrote:

- quote -

When you work through Schedule D you will find that the
entire capital loss carries over to 2005.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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"Vigo" <suerivas[at]earthlink.net> wrote:

- quote -

There are worksheets in the Sch D instructions which address this.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Vigo wrote:

- quote -

When he does the math (so to speak), it will be apparent
that this loss, unusuable in current year, will therefore
carry over.

ChEAr$,
Harlan Lunsford, EA n LA

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"Vigo" <suerivas[at]earthlink.net> writes:

- quote -

Yes, you have to use it even if you don't need it. You have
no choice but to take it on Sched D and hence to Form 1040.

*However*, be sure to fill out the capital loss carryover
worksheet in the Schedule D instructions (or wherever the
IRS stuck the worksheet this year). Given the scenario you
laid out, you'll likely discover that notwithstanding the
amount shown on Sched D and Form 1040, little or none of the
carryover actually was burned up.

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

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My college son has a capital loss carryover of about $2300. His only income
for 2004 is around $300 in wages and $4000 in taxable scholarships. He also
had a capital loss of $1200. Even without the carryover he would only have
an AGI of $3100. The standard deduction is more than that so he wouldn't owe
tax. Does he HAVE to take the capital loss carryover this year? It's wasted
because won't owe anything anyway, right? Can it be used in a future year
instead?

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