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You have to use it all.. Your cumulative gain/loss for the
4 quarters is -11, -5, -7 and +13. Why would you want to
limit it as it can be applied to other income and hence
reduce your early installments?.

Where it is really advantageous is when your CLCarryover is
more than $3,000 in excess of any gains. The $3,000
annualizes to a $12,000 reduction in annual taxable income.
For the Regular Method using 90% of current year's tax, you
would only get credit for the $3,000.

ed

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Say I have a capital loss carryover of 15 from 2003. During
2004, capital gains in the four reporting periods were 4, 6,
-2, and 20, for cumulative gains of 4, 10, 8, for the first
three periods, and 28 for the full year.

Since I know (as of March 31, 2004) that I have available a
loss of 15 to offset the gain, I propose to use as much as
is required to reduce the gain to zero for the first period,
etc for the following period. Obviously, I can only use it
once for the full year, so at the end I have to pay tax on
28-15 equals 13 of cap gains.

Does this seem legitimate? Or perhaps it is standard
practice? Your comments will be welcomed.

Stewart Rowe

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