capital gain and losses.

[arlo]

Client had hugh capital gain in 2005 (stocks) and paid the tax on gain. Same Client had a hugh capital loss in 2007 (stocks) could only expense $3000 of the loss. Is there anyway
that the 2007 loss could have been carryback to 2005? Client did his own tax return.
Anyone with a publication number that I could check this out.

[jimmcg]

Client had hugh capital gain in 2005 (stocks) and paid the tax on gain. Same Client had a hugh capital loss in 2007 (stocks) could only expense $3000 of the loss. Is there anyway
that the 2007 loss could have been carryback to 2005? Client did his own tax return.
Anyone with a publication number that I could check this out.

No and Pub 544

[FEDUKE404]

Simple answer

Client had hugh capital gain in 2005 (stocks) and paid the tax on gain. Same Client had a hugh capital loss in 2007 (stocks) could only expense $3000 of the loss. Is there anyway that the 2007 loss could have been carryback to 2005? Client did his own tax return. Anyone with a publication number that I could check this out.

NO

Explanation: "not even close!!"

[taxmom34]

if there was huge loss on the 2007 return, the excess over the $3000 would carry forward to the 2008 and 2009 etc.

[FEDUKE404]

Like ole man river...

if there was huge loss on the 2007 return, the excess over the $3000 would carry forward to the 2008 and 2009 etc.

True.

I have a client who "took a beating" in the stock market several years ago, and soon exited the stock market scene entirely.

Each year there is now an "automatic" $3000 long term capital loss shown on the Schedule D.

Hopefully the client will live long enough to "use" each of those pieces.

FE

[dan doshan]

What hurts is when they are not joint stock accounts and a spouse passes away leaving thousands of losses that end not being able to be carried forward or used.

[taxmom34]

even if filing status was married filing joint? i need to put my thinking cap on on this one.

[FEDUKE404]

Not sure either

even if filing status was married filing joint? i need to put my thinking cap on on this one.

Moi aussi !!

I do know carryforwards from a (single) decedent are forever lost (including estate), but I'm not sure of the fine print for a surviving spouse with $3k+ of loss carryforwards from a prior MFJ tax return. Things could get quite messy, figuring out "his" and "hers," especially if the loss carryforward had some age on it.

Let me know what you figure out.

FE

[dan doshan]

Capital losses die with the owner of the account. If a joint account then one half of the losses would be lost with the surviving spouse left with their half to carry forward.

[FEDUKE404]

Half

Capital losses die with the owner of the account. If a joint account then one half of the losses would be lost with the surviving spouse left with their half to carry forward.

Cite for this position?

[dan doshan]

Can't find a specific site but this is from Pub 544

Joint and separate returns. On a joint return, the capital gains and losses of a husband and wife are figured as the gains and losses of an individual. If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. Neither you nor your spouse can deduct any part of the other's loss.

If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss.

Death of taxpayer. Capital losses cannot be carried over after a taxpayer's death.

[FEDUKE404]

Still question remains....

Can't find a specific site but this is from Pub 544

Joint and separate returns. On a joint return, the capital gains and losses of a husband and wife are figured as the gains and losses of an individual. If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. Neither you nor your spouse can deduct any part of the other's loss.

If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss.

Death of taxpayer. Capital losses cannot be carried over after a taxpayer's death.

One could easily read the above as the full "individual" joint return carryover transfers to a surviving spouse.

This assumes there is NO married filing separately issue involved (this is a surviving spouse using MFJ in year of death and S -- perhaps QW -- afterwards).

Obviously all carryover ceases at the death of a single person or (unmarried) surviving spouse.

Community property rules may muck up things, but fortunately I do not live in such a state.

FE