Can stock losses offset income taxes

By Jennie Hoopes, CPA

Q: I have a capital short-term loss carried forward of $25,000 and a capital long-term loss carried forward of $6,000. A few months ago, I bought a stock that has a $25,000 gain. If I sell that stock and realize the gain, can I use my losses to offset the gain on my income taxes?

In short, yes. Capital losses, including unused losses carried forward from prior years, are netted against capital gains. Depending on the character of the gain as either short term or long term, it will offset those unused losses first. If your losses exceed your current year capital gain, you may also deduct up to $3,000 of your unused losses against your ordinary income.

Jennie Hoopes, CPA, a team member with Sweeney Kovar, LLP, in Danville, Calif. You can reach her at (925) 648-3660(925) 648-3660 or

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