Years ago, I had tens of thousands in capital gains losses. My former accountant, whose too busy this year, told me that even if I didn't hit the income threshold of $4200 or whatever in say 2007 that for, the IRS, I still lose $3,000 carry loss forward, per year, so 10yrs later, as an example, that $20,000 tax loss is gone whether I used it or not. Is that correct? The IRS website simply says I can carry it forward into perpetuity but doesn't explain if a year has no income and therefore unnecessary to use it. Now, it is the other way, and would like to minimize paying Uncle Sam! While I'll take the advice with a grain of salt obviously it is appreciated! Thank you!
From what I know it should be there in perpetuity. So long as you keep carrying it forward each year, and at the 3K limit. As far as not using it if you don't have to file due to income limits? Not sure on that. But that question needs to be directed to a serious tax professional, not jamokes here on ET, like me for example. Forget grains of salt, use sodium hydroxide. Not only does it keep you from taking advice as sacrosanct, it also helps clear clogged drains, and removes unwanted body hair! (Speak with a professional face-to-face. It's a serious question and needs to be treated seriously in your head.)
Thanks for the reply! I'll probably go into, the local, IRS office and ask as that has to be quicker than waiting on the phone for hours on end. I always thought you could carry it forward but this morning in an email, from my former accountant, she said in the eyes of the IRS, I'd have no carry forward loss left. So while I'm not whole overall, I'll owe Uncle Sam, a pretty penny unfortunately. Thanks a lot Jamokie as I appreciate it!haha
Hmm, you know, I am probably in a similar situation this tax year. I have loss-carry forward from last year, that will exceed my need to file due to other losses (I think. If I owe them money I'm going to go insane). But file I will anyway, to get it on record. I'll ask these questions to them and update in summer. It's a great question.
Just file it. If their website says "perpetuity", go for it. It'll fly. They won't waste man-hours on you. They have way bigger fish to fry.
Hey lookie, google fu: " For a large loss and no capital gains, your loss will carry forward indefinitely with a $3,000 reduction in the carry amount each year until it is at zero." http://finance.zacks.com/long-capital-gains-losses-carry-forward-3552.html
Don't follow this advice. The carry over is logged in their system and it's all automated so they will fry you the same as the bigger fish. Research CP2000 notices. Vandy maybe best to stick with music recommendations and leave tax advice for others
I've done just a bit of research and it looks like the opinions are mixed and doesn't appear to be anything easily found in hard print that says one way or another. I would lean towards disagreeing with your former tax guy and picking up the full loss in the year that you are required to file and not reducing by 3K per year for the years you didn't have a filing requirement. it's probably best to seek out a professional opinion from someone who understands trading taxation and be very wary of any opinions expressed on ET. I've noticed many occasions where flat out wrong tax advice is given here.
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