[slscott99]

Hi - I have stock that I receive every year which of course has been hammered - I want to sell just enough to take advantage of the maiximum 3000 capital loss, just to offset ordinary income.

I can sell stock I've held for a while and generate a long term loss or use stock acquired this year for a short term loss - does it make any difference at all for my purpose.

Also - does the trade have to settle in the current year ( I suspect the answer is yes.. _

Thanks,
SLS

[plonak]

I would see the long term stock

[AtlantaTaxExpert]

Sell the stock shares whose basis produces the BIGGEST loss per share. That way, you retain the most number of shares and will profit when the stock recovers.

If you do NOT think the stock will recover, then sell EVERYTHING and carry-forward the loss to future years.

[slscott99]

Thanks for the quick reply - a few follow ups if you please.
1. Can the loss be used to offset ordinary income even though I'm subject to AMT ?
2. Does the trade have to settle prior to 12/31 or just be ordered by that date.
3. If I take a long term loss in a custodian account in my minor son's name can I still claim the loss on my tax return ?
Thanks for all the help

[AtlantaTaxExpert]

1) I think the AMT will offset any benefit from the offset, but I am not sure.

2) The trade/transaction must be done on or before 12/31; the settlement date can be after 12/31 and still count for 2008.

3) Negative. That is your SON's account, not yours. The stock sale (and loss, if applicable) has to be reported on a separate tax return filed by you on your son's behalf using your son's name and SSN as the taxpayer. You need to do this even if there are no taxes due, to account for the stock sale. If you fail to file your son's return, the IRS will eventually send you a notice demanding a return be filed to reconcile the Form 1099-B they will receive from the broker.