Hello,
Heading into some low income years starting in 2025. Using Engaging Data's Tax Visualizer (fantastic tool btw), getting a better sense of how taxable income/cap gains stack and taxes are affected. We currently have $100k+ of capital loss carryovers, probably dating back to 2008.
If we generate $50k in capital gains in 2025, with limited taxable income say $50k comprised mostly of interest/non-qual dividends, do we have to offset those capital gains with our capital loss carryovers, even if that $50k in cap gains would have been taxed at 0% (per Tax Visualizer)? Or do we have the choice not to use our capital losses and carry them over to 2026?
If we are required to use capital losses to offset capital gains is the play to tax gain harvest up to the point that we would pay 15% cap gains rate on the entirety of our carryover capital losses (~$100k) in order to fully realize the benefit of the capital loss (-$3k deductible vs. taxable income notwithstanding)? Per Tax Visualizer that would be ~$173k in capital gains + $50k in taxable income.
Feels weird to have to use the entire cap loss we've been carrying for years all in one go, but worried we'll be offsetting 0% taxable capital gains if we don't.
We do have a bit more taxable income in 2024 ($250k+), maybe the play is to tax/cap gain harvest in '24 to insure we fully realize the benefit of our carryover losses this year. Maybe keep $3k in losses for '25 to offset taxable income?
Any guidance is appreciated. Thanks.
Heading into some low income years starting in 2025. Using Engaging Data's Tax Visualizer (fantastic tool btw), getting a better sense of how taxable income/cap gains stack and taxes are affected. We currently have $100k+ of capital loss carryovers, probably dating back to 2008.
If we generate $50k in capital gains in 2025, with limited taxable income say $50k comprised mostly of interest/non-qual dividends, do we have to offset those capital gains with our capital loss carryovers, even if that $50k in cap gains would have been taxed at 0% (per Tax Visualizer)? Or do we have the choice not to use our capital losses and carry them over to 2026?
If we are required to use capital losses to offset capital gains is the play to tax gain harvest up to the point that we would pay 15% cap gains rate on the entirety of our carryover capital losses (~$100k) in order to fully realize the benefit of the capital loss (-$3k deductible vs. taxable income notwithstanding)? Per Tax Visualizer that would be ~$173k in capital gains + $50k in taxable income.
Feels weird to have to use the entire cap loss we've been carrying for years all in one go, but worried we'll be offsetting 0% taxable capital gains if we don't.
We do have a bit more taxable income in 2024 ($250k+), maybe the play is to tax/cap gain harvest in '24 to insure we fully realize the benefit of our carryover losses this year. Maybe keep $3k in losses for '25 to offset taxable income?
Any guidance is appreciated. Thanks.
Statistics: Posted by Slow016 — Wed Aug 21, 2024 6:07 am — Replies 3 — Views 258