Originally Posted by toriccold
This year my socks are down $2,500 and want to ask about using that loss for a tax deduction.
I work as an independent contractor and always owe a fair amount in taxes a year so I'm always looking for deductions.
Can I write off this $2,500 loss?
yes unless you are in a wash sale situation. You won’t be able to claim the loss on your taxes until the stock is sold from your portfolio. Track the amount you paid for the purchase and sale of your stock also. These fees count toward the total loss when you’re making your claim on the tax return. You can deduct a total net loss of $3,000 in any single tax year. Although you will be able to use the entire loss, any leftover amount above $3,000 is stockpiled on your tax return to claim in future years.
Note;You need to c heck your trade to make sure it isn’t a wash sale. The IRS states that a wash sale occurs when you acquire or buy a substantially identical position or option to buy an identical stock to the one you sold within 30 days of your initial stock sale. Wash sales you’ve made can’t be claimed on your tax return