- 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

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

TurboTax Articles

What is a 1098-E: Student Loan Interest

If you're currently paying off a student loan, you may get Form 1098-E in the mail from each of your lenders. Your lenders have to report how much interest you pay annually. Student loan interest can be deductible on federal tax returns, but receiving a 1098-E doesn't always mean you're eligible to take the deduction.

What is Schedule F: Profit or Loss from Farming

If you earn a living as a self-employed farmer, you may need to include a Schedule F attachment with your tax return to report your profit or loss for the year. The Internal Revenue Service defines ?farmer? in a very broad sense?whether you grow crops, raise livestock, breed fish or operate a ranch.

Add a Comment

*0 / 3000 Character Maximum