How to Claim Loss of Equity When Filing Taxes
- 1). Find the cost of the stock. If you purchased the shares of stock over a period of years, you'll need to select the shares you sold. When reporting a sale, often it's best to use the most inexpensive shares if you believe the price of the stock will increase in value later. However, if you need the write off for that tax year, to reduce any like capital gains (long-term or short-term), select the shares and prices that fit your needs.
- 2). Include the cost of the stock purchase in your price. Always add the cost of the trade to the total price you paid and divide that number by the number of shares you purchased. When you sell the stock, you'll subtract the cost of the trade from the sale price and divide that amount by the number of shares you sold.
- 3). Evaluate the type of loss you had. If you held the stocks over a year, you'll have a long-term capital loss and report it in Part II of Schedule D. For property held less than a year and sold, it's a short-term loss, reported in Part I of Schedule D.
- 4). Write the description of the property in column (a), of either Part I or II. The description is nothing more than the number of shares sold and the trading symbol or company name. In column (b), use either the date you purchased the stocks or, if you sold stock purchased over the years, use the word "various' in column (b). Enter your sale date. The sale price is the amount listed on 1099-B. Make sure the cost of the trade is not included in the sale price.
- 5). Find the total cost of the shares if you purchased the stock at various times. Multiply the number of shares you're selling at each purchase price, and then add the numbers together to find the total cost. If you sold off one lot of stock you purchased at one time, you simply use the purchase price.
- 6). Subtract the cost of the shares from the price you received. Since you had a loss of equity, the number you put in column (f) is a negative. You can write off $3,000 of capital losses from your taxes or use the amount to offset any capital gains you made for the year. Married people filing separately only can use $1,500 of loss.
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