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    goheels's Avatar
    goheels Posts: 2, Reputation: 1
    New Member

    Oct 30, 2006, 06:04 PM
    Are investment losses deductible?
    I have a few poor investment decisions that did not pan out this year. I have losses from the sale of a stock. I also have commissions from the broker that bought and sold this stock.

    I am a homeowner, so I write off the interest and I take a few more typical deductions against my wages. Can I also include the losses AND the commission (as a total cost of purchasing the stock) as a write-off against my wages -- or does stock losses and commssions only apply to the interest income and capital gains.

    If I can write-off anything -- are their limits to how much I can deduct. I am still holding some of this stock as a paper loss and this is going to be a better than average year for my wages plus bonuses -- so I'd like to sell this dud now if I can write it off.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert

    Oct 31, 2006, 04:57 PM
    The broker commissions when you buy and sell the stock are added to the basis of your stock investment, so when you sell for a loss, you have a slighter higher loss.

    You can deduct the loss. First you must offset any capital gains you had selling other stocks. If, after all the ofsets, you still have a loss, you can deduct up to $3,000 against other income such as wages, dividends and interest. Any loss in excess of $3,000 carries forward to future years until it is used up.

    I have clients who are still carrying forwards tens of thousands of dollars from the stock losses of the year 2000.

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