When you sell a position at a loss, the IRS allows you to deduct that loss come tax day.
It works like this:
First, if you also booked gains for the year, you’ll be able to offset them on a dollar-for-dollar basis with no limit.
Second, if you recorded more losses than gains — or no gains at all — you can use your losses to offset some ordinary income. The maximum amount is $3,000 ($1,500 if married filing separately) … but you can carry additional losses forward for future tax years.
Doing this before year-end is a no brainer if you have losing positions that you don’t think will ever come back. You will not only get a tax break, but you can then take the proceeds from the sale and reinvest them in better long-term choices (such as solid dividend stocks).
Of course, even if you have underwater positions that you would like to continue holding for the long-term, you still might consider selling them at a loss for the tax advantage.
Why? Because as long as you wait more than 30 calendar days before buying back those same positions, the loss will count on your tax form.
Learn more about selling your dividend losers and how to make it a tax advantage in 2009.
To your dividend investing success,
InvestingInDividends.com
Most Commented Posts
Related posts:
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment