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Helpful tax moves to prepare for 2009
Tax form with pencil pointing to "Amount you owe"
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First of all, you can't report any capital loss unless you actually sell shares of your stock. I fear that some people think they can reduce capital gains or report a capital loss on Schedule D by the decline in value of their stock. This misunderstanding could cause monumental errors on 2008 tax returns.
If you actually have sold shares of something, you will get a Form 1099-B in January showing the broker exchange. And yes, any resulting capital loss (up to $3000) is reported as a negative figure on line 13 of the Form 1040. Therefore it reduces all "ordinary" --non-capital gain income on the front of the tax return.
Always enjoy the show. If this is the venue for questions I have one. If not, sorry! From the show on Sat., 12/20, I have a question about one of the tax tips. 'Twas stated that if losses from taxable stock investments are bigger than gains, an amount up to $3000. could be deducted from income on tax return.
Could I deduct this $3000. from money that is counted as income when rolling over from a traditional IRA to a Roth IRA. Specifically this December I have taken approximately $20,000 from a traditional IRA and rolled it over to a Roth IRA. I am in the 15% bracket and so will owe about $3000. in taxes on this rollover for 2008. If I have $3000. in losses from taxable mutual fund stock investments, can I use this to reduce or eliminate my taxes on the roll-over amount?
