How to report a stock loss on your Income Tax Return?

By | February 2, 2019

How to report a stock loss on your Income Tax Return?

Stock Loss

What is Stock Loss?

The loss incurred from the sale of any capital asset is called a Capital Loss. Whenever you sell your capital there might be a capital loss or a capital gain. When the selling price exceeds the purchase price of the assets you will receive capital gain and vice-a-versa. Capital assets are investments include stocks, bonds, mutual funds, real estate, etc. There are generally two types of capital assets such as long term and short term. If you hold an asset more than one year the capital gain or loss is termed as long term. If you have capital losses you can claim it against the capital gains. If the capital loss is more than the limit of yearly, one can carry forward it to the next year. Capital loss and gain are reported on Schedule D.

How to Report a Capital Loss?

  • If you sold any capital assets and it incurs loss or gains you should file Schedule D to Internal Revenue Service (IRS).
  • First of all, you should determine whether your capital loss is short term or long term. You should report your loss on IRS Form 8949 in which short term losses are reported in Part I and long term losses are reported in Part II.
  • One should fill complete information in the form regarding the name or description of the asset you sold, when the asset was obtained, when you sold it, for what price you bought or sold it, etc. Fill all the necessary items which are contained in the form.
  • Verify all the details you put in the form and submit it with the IRS. If you face any difficulty with the filing of the capital loss you have the best option that you can consult with the tax professional and he will ease your burden of filing the tax return.

More Related Queries:

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  • Capital loss tax calculator online
  • Do you have to report capital losses?

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