Investment Losses

Jan R asked:


I loaned a friend some money several years ago to help start a business, and the business failed and I was not repaid for the loan. I also, the same year, had losses from other investments (in the stock market). My understanding is that I can only deduct $3000 in investment losses for that year. Is the personal loan in the same category as the other investments — in other words, does it count as part of the $3000 limit? Or is there a way I can claim that loss separately? Thanks!

ORVILLE

vmsergei asked:


So my parents don’t work & got some cash stocked away in hi-yeld interest accounts. They made about 30K on their investments last year in interest income. What is the best way to reduce their taxes? Is giving 10K to their grandchild going to have an effect on their taxible income?

EUGENIO

screwed asked:


I am planning on making some investments outside the country (stock market investments). Can I access the profits while living in the US or will I have to pay capital gains taxes on it? If so, how much will I have to pay say for $10,000 in profits?

BOB

illuminate asked:


I’m self employed, but aside from my business income, I have personal investments, which have produced gains of about $20K in 2007. Do I need to pay SE tax on that or just my business income? Thanks for your help.

EMERSON

Sasha asked:


If your only source of income is stock investments but had a net realized loss for 07?

Anything negative would be below the minimum amount to report taxes am I correct? Any feedback would be appreciated.

MOHAMMAD

nkitchen31 asked:


I made $36k in 2008 and on my W4 I have 2 deductions. I am single, no kids, and don’t own a home. No other deductions I can think of besides maybe this $2000 loss from this horrible one day bad options investment.

BERNARD

Clay M asked:


I build new houses and remodel existing ones to own and rent out. During the construction process I have expenses uncommon to managing rentals. Even though I take no salary and do as much work as possible on each project, we still have a negative cash flow. After adding up the losses and deperciation, it offsetts my wifes income so we get all of her taxes back. Based on rental rates in our area, we calculate that it will take about 3 years for a property to break even. So we should be turning a profit in tax year 08. To take full advantage of the tax code while depreciating the buildings and then selling them in the future, Is there an advantage to holding these properties as personnel investments or should I form a business that builds and manages real estate?

MONTE

Greg asked:


I voluntary walked from a deposit and incurred legal fees from a Condo I was purchasing as an investment. Had no intention to live there. I’m thinking the total loss can be claimed on schedule D as a short term loss subject to $3K a year. I’ll need 18 years to recover. Am I correct on this and where on schedule D does this go?

CHESTER

kak asked:


I purchased vacant land 2 years ago and plan to sell it within the next few months. I haven’t used it for any purpose the last 2 years, so I’m assuming it’s considered investment property. Originally I had planned to build on the land, but now that I’m moving to a different city I need to sell the land.

I have 2 questions:

1. Are real estate taxes deductible on investment property? If so, are they reported in the same place as the real estate taxes I report for my primary residence?

2. I’ll probably break even on the property or even sell at a loss. Would this be considered a capital loss (if I consider it to be investment property)?

Thank you!

CHAD

Charles C asked:


Generally, the passive activity loss rules state that you can’t get a tax benefit this year for losses you have from passive activities unless you also have income from other passive activities.

However the IRS also says :

“Any passive activity losses (but not credits) that have not been allowed (including current year losses) generally are allowed in full in the tax year you dispose of your entire interest in the passive (or former passive) activity.” Please see IRS Publication 925 (http://www.irs.gov/pub/irs-pdf/p925.pdf) page 9 under Dispositions.

This is the question.

In 2007 we “disposed of your entire interest in the passive (or former passive) activity” How do we tell TurboTax we disposed of our entire interest and want to take all current and prior years’ passive losses. I’ve entered the K-1 for this investment as well as the long-term gain on the sale. In neither place did TurboTax ask about unallowed passive losses

Thanks

DUANE