about 10 years ago, i lost big on stocks. I could only use 3k losses every year, but had forgotten to do it on my taxes after the first year. I am expecting a large bonus this year, can i retroactively use the losses that were used vs the bonus received this year?
You can amend the tax returns for the prior years that you didn't take the $3K deduction on but you can't apply capital losses (stock) directly against orginary income (bonuses). However, there may be other ways of repositioning the income and loss sources to accomplish what you're looking for. Holler if you want to discuss further.
Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational... more
Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
The problem is that a bonus, even if it is stock, will be treated initially as ordinary income as it is earnings. Once it is taxed as ordinary income upon receipt, it becomes a capital asset with a basis equal to the amount of ordinary income recognized. If it increases after that point, the gains will be capital and can be offset by the losses. But Section 83 of the Internal Revenue Code basically makes the receipt of property for services ordinary income, even if it is stock.
Tax Attorney Bellevue
Tax Attorney Everett
Tax Attorney Federal Way WA
Tax Attorney Bothell WA
Seattle IRS Contact
IRS Offer In Compromise
Payroll Tax Attorney
Washington State DOR Tax Audit
IRS Tax Lien Removal
IRS Tax Levy Release
Tax Help Seattle
First you can only amend open years, generally 3 years, to apply the carryover. Second, for this year the year end bonus is ordinary income so the most it could be offset by is $3,000 of capital losses.
Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia... more
Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is
Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question.
Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.