This page uses JavaScript. Your browser either does not support JavaScript or you have it turned off. To see this page properly please use a JavaScript enabled browser.
Scroll Down
Bellwether Comunity Credit Union Go to main content

Facebook Linkedin Twitter YouTube Instagram

If You're Investing Your Money, You Need to Read These Tips

How did your portfolio perform this year? Unfortunately, every stock can’t be a winner, but if you have done well, remember that the government will be looking to take a cut of any profits in the form of capital gains taxes. The end of the year is a good time to consider unloading the losers to offset these capital gains. As 2017 comes to a close, here are a few considerations as you review your investments:

Long-term and short-term gains: When considering gains and losses, stocks should be split into two categories. Stocks that you’ve held more than a year are long-term, and those you’ve held one year or less are short-term. Long-term investments are subject to capital gains taxes, while short-term investments are taxed as regular income.

Net profit and loss: Again, keeping these two categories separate, you can sell off losing stocks to offset the gainers. You can only apply short-term losses to offset short-term gains, and long-term losses to offset long-term gains. The resulting net profit or loss will determine whether or not you owe.

Remember the stipulations: There are a few clauses to keep in mind as you balance out your portfolio. You can only write off $3,000 worth of losses in a single year. If you sell off more than that, you’ll be able to apply it to the following tax year. Additionally, the IRS will not allow you to claim a loss on a stock if you purchase it back within 30 days — this is called the Wash Rule.

Make sure to communicate your actions and/or intentions to your tax professional. If you prepare your own taxes, use Form 8949 to track your capital gains and losses for long-term investments.

Finally, when in doubt, consult a professional. When it comes to taxes, you’re always better off safe than sorry.

Go to main navigation