Currently, individuals are limited to deducting a net capital loss of $3,000 against their other income. But Senators Hatch and Lincoln have proposed a change to this law, and propose instead a $10,000 annual limit on capital losses. The proposed bill is S.978 and would raise the capital loss limit to $10,000 per year in 2009, and the amount would be indexed for inflation in later tax years.
I've seen clients who have enormous capital losses this year. If they exit the financial markets now, they may not live along enough to recoup the tax benefits of their losses. On the other hand, having capital losses to carry forward offsets future capital gains. And in an era when the capital gains tax could be increasing, having these losses can help protect future tax hikes.
What do you think of this idea? Would you want to be able to deduct more of your capital losses? Leave a comment... or better yet, write a letter to your Congressional leaders.
(Found via Pappastax and Don't Mess with Taxes.)
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THE $3000 LIMIT IS ENOUGH BUT WHAT I WOULD LIKE TO SEE IS THAT YOU DON’T HAVE TO USE THAT LOSS EVERY YEAR UNTILL IT IS USED UP, BUT TO ALLOW YOU TO USE IT WHEN NEEDED. IT WOULD ALLOW MORE FLEXIBLE TAX PLANNING.
Yes, to the $10K capital loss deduction idea.
yes to 10 k
The $3000 limit is enough? Are you kidding us? If the government taxes us on every single penny we make, why should we be limited to a $3000 loss deduction? In this day and age? That dollar figure is so antiquated, it’s not even funny. Get a clue Arthur
When you make it on a sale they tax it all,but will only let you write off 3000.00 a year.I will be 109 when all my write off is finished. All the scandles that went on the last two years,I am now out of the market for good,it really needs to go to 10 thousand write off a year,if it does I will still need to live to be 96 to be even.