- Days left

Just about everyone is crying about their losses on their investments, which saw massive reductions in value last year. Not all news about investment losses is bad, however. Those losses can play a key role in reducing your tax liability.

Capital losses on stock, bonds, and other investments can be used to offset capital gains that you may have had on other investments. In addition to that, up to $3,000 of your losses can be deducted from your income for the year. So while you may have lost a good chunk of money in the stock market, at least a portion of that can be recovered through tax savings.

You don't want to sell depreciated stocks only for tax benefits. If you think you've got a good investment that will perform well long-term, you're probably better off hanging onto it. But if you're planning on selling soon anyway, take into account the tax considerations, which may make the case for selling even more compelling.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.


Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Building Credit from Scratch

Start building credit...now.

View Course »

TurboTax Articles

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

What Is a Schedule M IRS form?

Note: The content of this article applies only to taxes prepared for 2009 and 2010. It is included here for reference only. In order to take the making work pay tax credit, the IRS requires you to prepare a Schedule M with your federal tax return.

Video: Tax Filing Requirements for Children

Depending on how much money they made during the year, your children may very well have to file for taxes. Learn about tax filing requirements for children with help from TurboTax in this video on tax tips.

Add a Comment

*0 / 3000 Character Maximum