"Michael B." <mystic02removethisplease[at]verizon.net> wrote:

- quote -

Thank you all for the answers! Much appreciated!

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"Michael B." <mystic02removethisplease[at]verizon.net> writes:

- quote -

Almost. Those two will net to a $20K *long-term* loss. Then
$3K of that will be taken against your ordinary income (no
choice), leaving a $17K *long-term* carryover to next year.

--
Rich Carreiro rlc-news[at]rlcarr.com

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"Michael B." <mystic02removethisple...[at]verizon.net> wrote:

- quote -

You must enter these transactions on Shedule D and take
$3,000 of the loss on 1040line 13. Then the remaining
$17,000 carries over on the Capital Loss Carryover
Worksheet. Yes, your long term loss will offset short term
gains if there are no other gains or losses involved.

ed

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Michael B. wrote:

- quote -

Close. If the above is all you have, the $20K loss is taken
as $3K against ordinary income (!) and $17K is carried
forward. The sequence is to first net long term losses again
long term gains, then short against stort, then netting what
remains as I did above.

The $17K loss, if you have no further gains will be used up
as $3K per year against ordinary income until it's used up.

JOE
www.blog.joetaxpayer.com

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Michael B. <mystic02removethisplease[at]verizon.net> wrote:

- quote -

You also get to use 3K against ordinary income this year, so
17K loss carries forward.

Seth

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mystic02removethisplease[at]verizon.net (Michael=A0B.) posted:

- quote -

You will find that, as the Schedule D reporting of capital
gains is worked through, there comes a point where you are
directed to _combine_ the results of the short- and
long-term sections. That _combining_ will result in your
long-term loss offsetting the smaller, short-term gain. The
remaining long-term loss will be carried forward (and you
should take care to make special note, so it is "remembered"
when the next year's return is prepared).

As the long-term loss carryover is worked down -- with at
least $3,000 useable each year, even against ordinary income
-- it may offset either/or short- and long-term gains. If,
however, at some point the loss carryover is _less_ than
either the long-term or the combined short- and long-term
gains, then it will be used _first_ to reduce the long-term
gain. Therefore, similar tax-advantaged income is the first
offset.

Bill

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I finally took a loss with a penny stock that I held over
the last 7 years. So here is my "hypothetical" situation:

I will have a 30K long term capital LOSS showing on my 2007
return

I will have a 10K short term capital GAIN showing on my 2007
return

Will the -30K + 10K = to -20K cary over for next year?

Or is it not possible to offset any long term LOSS towards
any short term GAIN?

Thanks for the feedback...

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