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Are capital losses deductible?

Capital losses are deductible for individual taxpayers up to $3,000 of ordinary income. The $3,000 deduction will be recorded as an adjustment for arriving at AGI. Additionally, the $3,000 deduction can be offset against any other type of income (e.g. ordinary, portfolio, and passive income).

Any excess net capital losses (the extent that capital losses exceed capital gains and $3,000 of ordinary income) will be carried forward for an unlimited amount of time.

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  • What are capital gains?

    Capital gains represent income reported from the sale of assets that are capital in nature. Capital gains will be reported from the sale of capital assets as the difference between the sales price and the carrying value (acquisition cost) of the capital asset. Tax treatment depends on how long the asset was held by the taxpayer and other specific details of the taxpayer.