Dear Valued Clients and Visitors: As our nation responds to COVID-19, our firm is taking precautionary measures by closely following and reinforcing the guidelines from the CDC and local health authorities. Our physical office is open on a intermittent basis. However, please be assured that we are open for business and ready to serve your needs.

If you have a tax problem or inquiry please call and if we are not in leave a message. A return phone call will be made within a short period of time. Now is the time to address your tax matter. We remain committed to our clients and colleagues through these unusual times. Please stay safe and healthy.

Law Offices of Robert T. Leonard, APC
Free Consultations Available
Toll Free 888-408-9486

How capital losses can reduce your tax bill

With many stocks meandering near the end of the year, some stocks in your portfolio may be as useful as your depleted fantasy football team. However, while these underperforming stocks may cause you some heartache, they could actually be a ray of sunshine when tax season comes around this spring.

Essentially, if you sell stocks at a loss, you may be able to use these losses to offset other gains in other investments. Even unexpected gains from employment (i.e. year end bonuses) could be protected from excessive taxes if underperforming stocks or other investments are sold. This is because you will have experienced a capital loss; the sale of a stock or other security for less than what you initially paid for it. 

Think of it as the opposite of a capital gain. This is when you sell a stock for more than what you paid for it, so you will end up paying a tax on the income you have earned. But when you lose money on a similar investment, there is no tax to be gained. In fact, the loss lowers what your taxable income would be.

Indeed, there are limits to what you can claim as a capital loss, and there may be the need to carry over losses to future tax years. Nevertheless, it is helpful to understand that colossal gains that may create unexpected tax bills could be mitigated by including losses. If you have questions about how capital losses can be included on your taxes, an experienced attorney can help. 

No Comments

Leave a comment
Comment Information

Send Us A Quick Message

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Law Offices of Robert T. Leonard, APC

Woodland Hills Office
21700 Oxnard Street
Suite 2060
Woodland Hills, CA 91367

Toll Free: 888-408-9486
Phone: 818-224-7935
Fax: 818-587-3833
Woodland Hills Tax Law Office

Los Angeles Office
10100 Santa Monica Blvd.
Suite 300
Los Angeles, CA 90067

Toll Free: 888-408-9486
Phone: 818-224-7935
Fax: 818-587-3833
Map & Directions

Call Today