If you invest in the stock market, please read on…
When investing in stocks, the obvious goal is to profit on your investment. When you lose money in the stock market, this is referred to as capital losses. Losing money in the stock market is not fun, BUT there is an advantage.
Capital losses offset your capital gains. Net losses of up to $3,000 can be used to offset other (non investment) ordinary income. Unused losses are carried over to subsequent years indefinitely. Consider selling securities in loss positions to offset this year's capital gains.
However, you do need to watch out for wash sale rules. If you buy identical stock within 30 days before or after the sale, the loss isn't allowed.
So, as we go into tax season, be sure to discuss this with your accountant so that you can form a plan to use capital losses to your advantage and pay less in taxes.
Feel free to reach out to our team with any questions.