30.1 Planning Year-End Securities Transactions

First establish your current gain and loss position for the year. List gains and losses already realized from completed transactions. Then review the records of earlier years to find any carryover capital losses. Include nonbusiness bad debts as short-term capital losses. Then review your paper gains and losses and determine what losses might now be realized to offset realized gains or what gains might be realized to be offset by realized losses.

If you have already realized net capital losses exceeding $3,000 ($1,500 if married filing separately), you may want to realize capital gains that will be absorbed by the excess loss. Remember, only up to $3,000 (or $1,500) of capital losses exceeding net capital gain may be deducted from other income such as salary, interest, and dividends.

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image Planning Reminder
December 31 Deadline for 2012 Gains and Losses
If you want to realize gains on publicly traded securities, you have until December 31, 2012, to transact the sale. Gain is reported in 2012, although cash is not received until the settlement date in 2013. If you do not want to realize the gain in 2012, delay the trade date until 2013.
Losses are also realized as of the trade date; a loss on a sale made by December 31, 2012, is reported on your 2012 return.
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Planning for losses.

Realizing losses ...

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