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I'm not an accountant, but doesn't this assume that the person has already paid taxes on the capital gains? Can you claim the loss if you never claimed the gai

I'm not an accountant, but doesn't this assume that the person has already paid taxes on the capital gains? Can you claim the loss if you never claimed the gain? I can't imagine that many people with Bitcoins were rushing to pay their taxes to the tune of tens or hundreds of thousands of dollars over the last couple of years...

josephlord 13y ago
If you make a $100,000 loss on an investment and the next year make a $100,000 profit on a (different) investment you can point to the loss and point out that overall you have made no profit and therefore are liable for no tax. Obviously each loss can only be used once.
- eliasmacpherson 13y ago
  I think he's asking if your initial 1k becomes 200k and you lose 100k from the 200k, can you use that loss of 100k to offset before you have been taxed on the 199k gain.
  - josephlord 13y ago
    That is a possible reading although I'm not sure if it was the intended one. That would just be a 1k loss that you could carry forward. I am not a lawyer, accountant or American.
  - exelius 13y ago
    No; you can't lose more than your principal. So your initial 1k would be all you "lost". UNLESS you locked those gains in by paying taxes on them; though in that case you would just be re-collecting tax you already paid very slowly...
  - deleted 13y ago
    [deleted]
- JonFish85 13y ago
  Is that true? Again, I'm not an accountant, so it's an honest question. I was always under the impression that you can write down that $100,000 loss only $3,000/year. So the 2nd year, you'd have $97,000 profit to be taxed on.
  - gaadd33 13y ago
    I think you can take up to $3K/year in losses if you have no gains. So if you have 0 gains, you adjust your income down by $3K. If you have 10K in gains, you can negate out that 10K. That's my early morning understanding of it though.
  - rsanders 13y ago
    In the US, capital losses can be applied to capital gains without any such limit. Perhaps you are thinking of the amount of carried forward cap loss that can be applied to offset ordinary income.
  - gamblor956 13y ago
    Yes, it's generally true. Capital losses can generally be used to offset subsequent capital gains, or up to $3000 of ordinary income a year.

josephlord 13y ago

If you make a $100,000 loss on an investment and the next year make a $100,000 profit on a (different) investment you can point to the loss and point out that overall you have made no profit and therefore are liable for no tax. Obviously each loss can only be used once.

eliasmacpherson 13y ago
I think he's asking if your initial 1k becomes 200k and you lose 100k from the 200k, can you use that loss of 100k to offset before you have been taxed on the 199k gain.
- josephlord 13y ago
  That is a possible reading although I'm not sure if it was the intended one. That would just be a 1k loss that you could carry forward. I am not a lawyer, accountant or American.
- exelius 13y ago
  No; you can't lose more than your principal. So your initial 1k would be all you "lost". UNLESS you locked those gains in by paying taxes on them; though in that case you would just be re-collecting tax you already paid very slowly...
- deleted 13y ago
  [deleted]
JonFish85 13y ago
Is that true? Again, I'm not an accountant, so it's an honest question. I was always under the impression that you can write down that $100,000 loss only $3,000/year. So the 2nd year, you'd have $97,000 profit to be taxed on.
- gaadd33 13y ago
  I think you can take up to $3K/year in losses if you have no gains. So if you have 0 gains, you adjust your income down by $3K. If you have 10K in gains, you can negate out that 10K. That's my early morning understanding of it though.
- rsanders 13y ago
  In the US, capital losses can be applied to capital gains without any such limit. Perhaps you are thinking of the amount of carried forward cap loss that can be applied to offset ordinary income.
- gamblor956 13y ago
  Yes, it's generally true. Capital losses can generally be used to offset subsequent capital gains, or up to $3000 of ordinary income a year.