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  1. In my last year's tax form (1099 form) from a brokerage company (TD Ameritrade), I don't find my loss realized when I sold some mutual funds last year. TD Ameritrade said that the 1099 doesn't calculate gains and losses, but they offers the Gains/Loss Tracker on the Web site to create a Schedule D.

    My concern is that my loss is not shown on my 1099 form, and how IRS can know my loss? Is it possible for me to claim the loss on my tax report? How I can claim the loss?

  2. Also my income was less than $20k last year, so I will expect all my withheld Federal and State tax back. Given that, shall I still report the loss of my mutual funds in the tax report for last year? Can I not do it now, so that I can save it for the future when I have more income to use it to offset my income tax then?

(Sorry this is the first time I have to deal with such a case)

Thanks!

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3 Answers 3

up vote 4 down vote accepted

My concern is that my loss is not shown on my 1099 form, and how IRS can know my loss? Is it possible for me to claim the loss on my tax report? How I can claim the loss?

You report your cost basis on your tax return (form 8949). You calculate the gain as the difference between the gross proceeds reported to you on the form 1099 and your cost basis.

Given that, shall I still report the loss of my mutual funds in the tax report for last year? Can I not do it now, so that I can save it for the future when I have more income to use it to offset my income tax then?

No, you cannot "save" anything to anywhere. You report your transactions in the year they occurred. If you don't get tax benefit from that loss - its "lost" for you. You can only deduct up to $3000 capital losses, so if your loss is more than $3000 (net with all the gains) - the remainder gets carried over to the next year. But if you didn't report the transaction in the year it occurred - it cannot suddenly appear on your tax return a year later, it doesn't work that way.

You may also potentially get into the area of NOL, but if you have $20K income - capital losses won't take you there.

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Thanks! In my 2013 (overall income <$15k, net loss $15k in my margin account and net loss $2k in my Roth IRA account), do you mean that I will have to give up $3k loss for nothing (and only $12k loss remains for the future)? In my 2014, I will have even less income (probably zero income), and will I have to give up $3k loss again (and $9k loss for 2015 and future taxes)? –  Tim Apr 19 at 20:23
    
@Tim Roth (or any other) IRA losses are irrelevant. Margin loss (if realized) is a capital loss - subject to the $3K limit. So with income $15K, your AGI is $12K and suspended capital loss is another $12K which you can deduct over the course of the next 4 years ($3K each). Yes, you're going to "give up" these losses for nothing. You can apply them to prior years (up to 2 years) if its beneficial. –  littleadv Apr 19 at 21:42
    
(1) "apply to prior years (up to 2 years)", do you mean that if I paid taxes in the past two years, I can use my loss to get back some money I paid as tax in the past two years? –  Tim Apr 19 at 21:54
    
(2) Someone said that after I gave up $3k loss for 2013, "The remaining $12,000 loss (possibly more if the line after the standard/itemized deduction is negative), be sure to do the capital loss carryforward worksheet in the schedule D instruction. If you have $0 other income, you will show ($3000), but carry the entire amount forward to 2015. (This worksheet appears to be a mystery to many of the people on Yahoo. Don't believe them when they say even if you don't have income, you will use $3000 a year up.) You will carry it forward until you either have $12K in income or you die. " –  Tim Apr 19 at 21:54
    
Is he correct? If yes, does he mean that I gave up $3k loss for 2013 tax, and I will not give up any loss for 2014 tax (in 2014, I will likely not have any income, and not buy or sell any funds/stocks). But I am not sure what he means by "until you either have $12K in income or you die." –  Tim Apr 19 at 21:56
  1. Cost basis is how you'd note what you initially paid compared to what you ended up selling it and thus producing the loss. The 1099 will state the proceeds from the sale of $x where you have to supply the cost basis of $y that is what you paid initially.

  2. Capital loss carry forward would apply as a way to carry your losses forward if the amount is large enough. Otherwise, you may use up some of the losses this year.

Course it is worth noting that this isn't professional advice and I would consult with an accountant or other tax specialist for your case if you want advice that can be enforced as this is a free answer.

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You can self-report your basis on Schedule D, which is much more common than you'd think. In the event of examination, you would need to have some kind of evidence to substantiate your basis claim. You claim losses by proceeding through Schedule D and entering the proceeds and basis for the assets, then totaling.

If your income was less than $20k last year, both ordinary income and capital gains, then your capital gains tax will be zero. Taxpayers in the 10% and 15% brackets generally pay zero CG tax.

You may be able to carry forward capital losses if they are not usable in the current year. You cannot choose to have carryover losses unless your 2013 losses exceeds gain. Although there is an option to elect to carryback losses 2 years, it's unlikely to apply to you.

You can use the carryforward worksheet to determine the eligible amount. The eligible amount of your carryforwards you can use each year is capped at $3,000 (half that for married filing separately).

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Carryback is for NOL, not capital losses. IIRC capital losses are not allowed in NOL calculation. –  littleadv Apr 19 at 22:38
    
Yeah, that's true, I supposed it's highly unlikely a $20k income taxpayer will have an NOL. I'll qualify the carryback reference better. –  NL7 Apr 20 at 5:03
    
Is NOL only for a company not for an individual like me? @littleadv –  Tim Apr 20 at 14:13
    
@Tim individuals can have NOL as well. –  littleadv Apr 20 at 18:30
    
How to know if I can have NOL? @littleadv –  Tim Apr 20 at 18:33

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