Ask Experts Questions for FREE Help !
Ask
    anonamoose's Avatar
    anonamoose Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jan 16, 2010, 11:50 AM
    Do IRC 1256 futures gains offset carryover stock losses?
    I have about $20k in stock losses to carry over into 2010, and plan to only trade currency futures this year. I have begun reading on the tax handling of these types of trades and believe in this situation, my best option is to opt out of IRC 1256 for IRC 988, since (I believe) any gains would offset short term losses, and if I do incur a loss on currency futures for 2010, I could write that off as ordinary income.

    However, if I did opt for IRC 1256, and suppose I gain $20k in currency futures this year, would that result in a net $0 investment taxes for 2010 (if carryover losses and 2010 gains cancel out), or do these gains not cancel out my prior carryover losses? If that is the case, would I have to pay taxes on the $20k gains at 60/40 long term/short term then deduct the maximum $3k in stock losses short term such that I would carry $17k over into 2011?
    anonamoose's Avatar
    anonamoose Posts: 2, Reputation: 1
    New Member
    		  
    #2

    Jan 16, 2010, 11:54 AM

    I failed to mention that my carryover losses are all short-term and I am not a business trader and do not have trader tax status.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Jan 17, 2010, 11:18 PM
    Sorry, but the opt-out process that you cite is beyond my level of expertise.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Can short term capital losses offset long term capital gains in the same tax year? [ 1 Answers ]

A friend sold some investment real property this year and had a large long term capital gain. He invested the proceeds in the market and the values are down. If he sells the investments now he will have some short term capital losses. Can he use the STCL to offset the LTCG? He also paid...

Setoff and carry forward losses in futures & options in india [ 1 Answers ]

This is vikas agrawal, I had losses in future & options in India, I had many other income sources. So I want to setoff my losses, I want to know from which income my future & options losses can be setoff, and for how many years I can carry these losses. I'm writing my other incomes 1) salary...

Setoff and carry forward losses in futures & options [ 1 Answers ]

Sir, This is vikas agrawal, I had losses in future & options, I had many other income sources. So I want to setoff my losses, I want to know from which income my future & options losses can be setoff, and for how many years I can carry these losses. I'm writing my other incomes 1)...

Capital losses offset self employment income? [ 3 Answers ]

My wife and I have capital losses in excess of $250,000 from the sale of stocks. Now, we've started a new successful business. Are we limited to just $3000 of our losses offsetting our self employment income each year? Thanks.

Capital gains and losses [ 3 Answers ]

I have had a loss on the sale of stock. I understand I can only claim 3000 per year. Does this mean I can deduct the entire 3000.00 or is it a percentage of the 3000.00? By the way this is a long term loss.

View more questions Search