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Capital Gains/Losses question
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jessica
Jun 13, 2017, 2:43:13 AM6/13/17
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Re: Capital Gains/Losses question
I have accumulated capital losses over a few years.
I am doing a 1031 exchange. If the sales proceeds are more than what I invest in the replacement property then can the excess proceeds be set off against my accumulated capital losses from prior years and not have to pay any capital gains taxes??
As an example if the difference between net sales proceeds of the sale and what I invest in the new property is say $50,000, can I offset this 50k against accumulated losses from prior years and not have to pay any capital gains taxes?
Your input would be highly appreciated.
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I have accumulated capital losses over a few years.
I am doing a 1031 exchange. If the sales proceeds are more than what I invest in the replacement property then can the excess proceeds be set off against my accumulated capital losses from prior years and not have to pay any capital gains taxes??
As an example if the difference between net sales proceeds of the sale and what I invest in the new property is say $50,000, can I offset this 50k against accumulated losses from prior years and not have to pay any capital gains taxes?
Your input would be highly appreciated.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
lotax
Jun 13, 2017, 9:58:11 AM6/13/17
to
jessica...
First of all, is your "exchange" really an exchange, or are you just taking the proceeds from a sale and reinvesting a part of those proceeds in similar property?
Second, you've managed to blur the distinction between money received and the taxable income that it might represent to you. There are a couple of steps involved in figuring out how much of the "cash" you keep will be taxable income.
And third, your capital gains and [carried over] capital losses will net against each other on your tax return, automatically. You want to assure yourself that the gain from the "excess" proceeds of the exchange will be taxed as a capital gain and not as something else... Look carefully at the property that you are disposing of in the exchange to determine what type of gain you'll get from it.
Luck!
First of all, is your "exchange" really an exchange, or are you just taking the proceeds from a sale and reinvesting a part of those proceeds in similar property?
Second, you've managed to blur the distinction between money received and the taxable income that it might represent to you. There are a couple of steps involved in figuring out how much of the "cash" you keep will be taxable income.
And third, your capital gains and [carried over] capital losses will net against each other on your tax return, automatically. You want to assure yourself that the gain from the "excess" proceeds of the exchange will be taxed as a capital gain and not as something else... Look carefully at the property that you are disposing of in the exchange to determine what type of gain you'll get from it.
Luck!
Stuart O. Bronstein
Jun 14, 2017, 12:48:31 AM6/14/17
to
lotax <lo...@hotmail.com> wrote:
> jessica...
...
depreciation recapture.
--
Stu
http://DownToEarthLawyer.com
> jessica...
...
> And third, your capital gains and [carried over] capital
> losses will net against each other on your tax return,
> automatically. You want to assure yourself that the gain from the
> "excess" proceeds of the exchange will be taxed as a capital gain
> and not as something else... Look carefully at the property that
> you are disposing of in the exchange to determine what type of
> gain you'll get from it. Luck!
Right. If it's depreciable property, some of that might be
> losses will net against each other on your tax return,
> automatically. You want to assure yourself that the gain from the
> "excess" proceeds of the exchange will be taxed as a capital gain
> and not as something else... Look carefully at the property that
> you are disposing of in the exchange to determine what type of
> gain you'll get from it. Luck!
depreciation recapture.
--
Stu
http://DownToEarthLawyer.com
Arthur Rubin
Jun 14, 2017, 6:32:29 AM6/14/17
to
On Monday, June 12, 2017 at 11:43:13 PM UTC-7, jessica wrote:
> Re: Capital Gains/Losses question
>
> I have accumulated capital losses over a few years.
>
> I am doing a 1031 exchange. If the sales proceeds are more than what I invest in the replacement property then can the excess proceeds be set off against my accumulated capital losses from prior years and not have to pay any capital gains taxes??
>
> As an example if the difference between net sales proceeds of the sale and what I invest in the new property is say $50,000, can I offset this 50k against accumulated losses from prior years and not have to pay any capital gains taxes?
>
> Your input would be highly appreciated.
I agree with the other posters. I would add, however, that, in any year in which you have a net capital loss, you are required to claim $3,000 of that loss; and, depending on your net imcome before exemptions, it may not be carried over to the next year. Furthermore, if any claimed loss is in a "closed year" (probably 2012-2013 or earlier), you lose the benefit of the $3,000, but it may not be carried over to the next year.
> Re: Capital Gains/Losses question
>
> I have accumulated capital losses over a few years.
>
> I am doing a 1031 exchange. If the sales proceeds are more than what I invest in the replacement property then can the excess proceeds be set off against my accumulated capital losses from prior years and not have to pay any capital gains taxes??
>
> As an example if the difference between net sales proceeds of the sale and what I invest in the new property is say $50,000, can I offset this 50k against accumulated losses from prior years and not have to pay any capital gains taxes?
>
> Your input would be highly appreciated.
--
Arthur Rubin, AFSP, CRTP
Brea, CA
lotax
Jun 14, 2017, 6:34:32 PM6/14/17
to
I'm pretty sure that the "closed year" rule doesn't apply to capital loss carryforwards. The unused [carryforward] portion of your capital loss will carry over from year to year .. to year .. to year .. to year ...
I'm still trying to use up a capital loss that arose in 2008!!!
I'm still trying to use up a capital loss that arose in 2008!!!
Arthur Rubin
Jun 15, 2017, 12:22:53 AM6/15/17
to
Arthur Rubin
Jun 15, 2017, 12:32:56 AM6/15/17
to
On Wednesday, June 14, 2017 at 3:34:32 PM UTC-7, lotax wrote:
> I'm pretty sure that the "closed year" rule doesn't apply to capital loss carryforwards. The unused [carryforward] portion of your capital loss will carry over from year to year .. to year .. to year .. to year ...
>
> I'm still trying to use up a capital loss that arose in 2008!!!
What I meant, is that if you forgot to claim the $3000 deduction in 2009, you can no longer claim it (closed year rule), but your current carryover can be readjusted to reflect the $3000 that should have been used in 2009.
>
> I'm still trying to use up a capital loss that arose in 2008!!!
--
Arthur Rubin, AFSP, CRTP
Brea, CA
Alan
Jun 15, 2017, 8:55:21 PM6/15/17
to
On 6/14/17 9:32 PM, Arthur Rubin wrote:
> On Wednesday, June 14, 2017 at 3:34:32 PM UTC-7, lotax wrote:
>> I'm pretty sure that the "closed year" rule doesn't apply to capital loss carryforwards. The unused [carryforward] portion of your capital loss will carry over from year to year .. to year .. to year .. to year ...
>>
>> I'm still trying to use up a capital loss that arose in 2008!!!
>
> What I meant, is that if you forgot to claim the $3000 deduction in 2009, you can no longer claim it (closed year rule), but your current carryover can be readjusted to reflect the $3000 that should have been used in 2009.
I don't think this is true. I don't have the citation, but I am almost
> On Wednesday, June 14, 2017 at 3:34:32 PM UTC-7, lotax wrote:
>> I'm pretty sure that the "closed year" rule doesn't apply to capital loss carryforwards. The unused [carryforward] portion of your capital loss will carry over from year to year .. to year .. to year .. to year ...
>>
>> I'm still trying to use up a capital loss that arose in 2008!!!
>
> What I meant, is that if you forgot to claim the $3000 deduction in 2009, you can no longer claim it (closed year rule), but your current carryover can be readjusted to reflect the $3000 that should have been used in 2009.
certain that per Section 1212 and its regulations and court cases, your
carryover loss must go to the next year. If you fail to use a carryover
loss (I.e., you would have benefited from its use.) it is lost. For
example, let us say that a taxpayer had a carryover loss from 2008 of
$5000 and that there was no need to file in 2009 and that none of the
carryover would have been used in 2009. Tax returns were filed in 2010
through 2015 and the carryover loss was never entered on the 1040. In
order to determine how much of that loss is available for 2016, the
taxpayer must recalculate 2010 through 2015. Any amount that could have
been used in 2010 through 2013 is gone forever as those years are
closed. 2014 can be amended if there would have been any loss left after
the recalculations. Ditto for amending 2015 and filing 2016.
There is an explanation of this on page 69 of Pub 550 that conforms to
my understanding of the regs and cases I have seen in the past. It works
just like the way "allowed or allowable" depreciation works. The IRS
assumes you took the allowable depreciation in any year even if you
failed to actually claim it.
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