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Capital Gains & Losses (Stock & Mutual Fund Sales)


Let me cover the rules about stock and mutual fund sales and year end strategies:


CAPITAL GAINS............ Taxes are assessed just on closed positions. That means any unrealized (not sold) positions aren't subject to any tax.



LOSSES......... Gains and Losses are netted out. $3k is the maximum net that can be written off in 2022. Any net losses over that amount aren't lost: the amount is carried over and used up against future year gains.


For example, let's say gains for the year are $50k and losses are $20k. You have net gains of $30k, all subject to tax.


Instead of losses of $20k, let's say it's 60k. You have net losses of 10k. $3k is the maximum that can be deducted in 2022, so the unused 7k is carried over, to offset future year gains.


WHAT TO DO......... If you currently have net gains for the year, you should look at your portfolio to see if there are any loss positions you would like to close out. Do that before 12/31 and you can offset those losses against your gains.


Hope this helps. If you have questions, please let me know.

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