Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 09-30-2009, 09:56 AM
Junior Member
 
Join Date: Sep 2009
Posts: 1
S-corp loss offsetting long term cap gains

I have an S-corp. Estimated loss of $40,000 for 2009.
I will also have $50,000 long term cap. gain on IBM stock sales.

Does the $40K loss offset the $50K gain?
If so, is my tax on the stock sale 15% of $10K?

Thanks for your help.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-05-2011, 08:23 AM
Junior Member
 
Join Date: Apr 2011
Posts: 4
Losses on your investments are first used to offset capital gains of the same type. So short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain. what you should be taxed depends on your gains are short term or long term.
Short-term profits are taxed at your maximum tax rate, just like your salary, up to 35% in 2010.
Long-term gains are treated much better. Long-term gains in 2010 are taxed at a flat 15% except for taxpayers in the 10% or 15%t bracket. For low-bracket taxpayers, the long-term capital gains rate is 0% in 2010.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 04-05-2011, 11:39 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
“I have an S-corp. Estimated loss of $40,000 for 2009.I will also have $50,000 long term cap. gain on IBM stock sales.Does the $40K loss offset the $50K gain?If so, is my tax on the stock sale 15% of $10K”---->Yes. It depends on your tax bracket( as long as your marginal tax rate is over 15%). To the extent that your S corporation losses are deductible by you, they would be available to offset the capital gain income. As you have your basis in the S-corporation loss, you can take the loss on your 1040. Although your S-corporation losses and capital gains are different line items on your 1040,( losses on S-corp would go on Schedule E, and your CG are reported on 1040 Schedule D.) they’ll end up canceling each other out by the time you get down to your AGI and finally taxable income on 1040.
Please visit the website here; on CGs tax Capital gains tax in the United States - Wikipedia, the free encyclopedia



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Are Long Term Health Insurance Premiums deductible? Pearl Medical 5 09-06-2011 04:57 AM
Death Benefit from Long Term Disability Taxable? Coadysmom Income 3 08-18-2011 12:14 PM
How do I explain the need for Long Term Care to my clients? bookkeeping Retirement Planning 1 06-10-2008 07:26 AM
Who should be getting Long Term Care Coverage? TaxGuru Retirement Planning 1 03-05-2008 06:50 PM
Don't forget to deduct your Long Term Care Premiums! TaxGuru Itemized Deductions 0 04-01-2007 12:44 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning