I have a tax question and this is an area I'm trying to educate myself on so I appreciate any thoughts.
I have one stock holding that I bought in Feb 2013. It's only worth about $1,500, but I'm up about 70% on the investment overall. Since it's such a small amount I'm considering selling and rolling it into other investments. By the looks of it, I'll have about $290 of capital losses this year with LC. Will this help offset some of the gains? What happens to my capital losses if I have no capital gains against it for the current year? Do losses simply 'roll over' to the next year?
I hope this will help me better understand the tax implications of LC/Prosper as well. Thanks!
Ok and if what I'm understanding correctly from what I read, if I don't have any capital gains to offset the losses - it will be offset ordinary income.
Yes, your capital losses, up to $3000 maximum per year, will be deducted from other ordinary income (salary, interest, etc).
If your net losses are greater then $3000, then you will deduct $3000 in the current year, and the amount over $3000 gets carried forward, indefinitely, to be used up to $3000 per year, until all used up.