Tax advantages of Capitol loses

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edguev66
Posts: 8
Joined: Mon Oct 02, 2017 5:40 am

Tax advantages of Capitol loses

Post by edguev66 »

I'm getting ready to move to Germany and am in need a cash for several different purchases i can't make with a low interest credit card. I could sell some of the Vanguard stock I owe and take the capitol losses off my taxes for 2020 or i could take cash advances on the credit card at a very low interest rate. I intend to pay off the card or purchase more stock when certain windfalls come my way but that's about a month after i need the cash. So the question i have is, is it actually better to go ahead and take advantage of the capitol loss. I know the point of investing is to buy low and sell high but when you need a cash infusion is selling at a loss a good idea? thanks for the advice/info

edguev66

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mjedlin66
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Posts: 1400
Joined: Wed Oct 02, 2013 7:51 pm

Re: Tax advantages of Capitol loses

Post by mjedlin66 »

I'm not an expert by any means, but my understanding was that capital losses can ONLY be used to offset capital gains in the same tax year.

So... I recommend you do some reading to that effect.
Owner/creator of TSPcalc.com - "Know your numbers"

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userque
Posts: 657
Joined: Mon May 05, 2014 5:43 pm

Re: Tax advantages of Capitol loses

Post by userque »

I believe some losses can carry forward:

https://finance.zacks.com/long-capital- ... -3552.html
"In the land of idiots, the moron is King."

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bloobs
Posts: 1073
Joined: Tue May 21, 2019 8:00 pm

Re: Tax advantages of Capitol loses

Post by bloobs »

edguev66 wrote:I'm getting ready to move to Germany and am in need a cash for several different purchases i can't make with a low interest credit card. I could sell some of the Vanguard stock I owe and take the capitol losses off my taxes for 2020 or i could take cash advances on the credit card at a very low interest rate. I intend to pay off the card or purchase more stock when certain windfalls come my way but that's about a month after i need the cash. So the question i have is, is it actually better to go ahead and take advantage of the capitol loss. I know the point of investing is to buy low and sell high but when you need a cash infusion is selling at a loss a good idea? thanks for the advice/info

edguev66
The only way you gonna know for sure is to use a spreadsheet to lay out the estimated costs side-by-side; otherwise it is all hypothetical.
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Bubba
Posts: 169
Joined: Thu Mar 05, 2020 3:40 am

Re: Tax advantages of Capitol loses

Post by Bubba »

mjedlin66 wrote:I'm not an expert by any means, but my understanding was that capital losses can ONLY be used to offset capital gains in the same tax year.

So... I recommend you do some reading to that effect.
True and they're specific. For example, short term losses have to be used to offset short term gains first, then you can apply the short to long term gains, although sometimes this is not allowed.

edguev66
Posts: 8
Joined: Mon Oct 02, 2017 5:40 am

Re: Tax advantages of Capitol loses

Post by edguev66 »

from the link provided by useque

Offsetting Gains With Losses

Capital losses must first be used to offset any capital gains you realized during the year. Only if you have more losses than gains can you use the losses as a write-off against your other income. Some tax planning in the timing of your sales can help reduce the tax burden of windfall profits. For example, if you have a big capital gain for the year, it may be appropriate to take some losses from other investments to reduce the taxes on the gain.

so it looks like selling at a loss does have some advantages. thanks for the help

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