A capital loss can only he used to write off losses in the current year up to $3000. That is you can deduct $3000 from your ordinary income. So say you sell some assets for 15k profit and others for a 30k loss. Your net capital loss is 15k. You are allowed to carry forward those losses at 3k per year and deduct it from your income in future years.
What is not allowed is using 2018 losses to offset 2017 income. So in 2017 you invest 20k and sell it for 120k, you owe taxes on 100k. You should have set aside part of that 120k to pay taxes. But like a retard, you reinvest it all. Now in 2018 your 120k is only worth 60k. So you sell that to pay the taxes owed off the 100k gain. You lost 60k on the sale. Congrats. You can now deduct 3k from your taxes for the next 20 years.
Seems somewhat unfair to this guy but I guess that's how it is.
To be honest he's quite retarded. Some people in the thread pointed out that whenever you make any gain, it's your responsibility to set aside the part that is due in taxes.
I know it's not intuitive for most people (who assume they can balance things over several years or whatever), but if you run a business or pay income tax it's exactly like that in most countries in the world.
Unless you have a specific tax status that allows you to spread losses or gains over several years.
For instance in most countries a writer who works years on a book and then gets all the profits in a single fiscal year might be allowed to spread the profits over several years of income to avoid hitting higher income tax brackets "artificially". But it always require some preparation, or at least some paperwork when you get the money.
You can't : make the money, reinvest 100% of the net, lose it, forget about it for a year, and expect the tax agencies to call it a wash.
Although most tax agencies in the world are able to work deals and payment plans for such situations, because it still happens (a lot) and they usually don't want to waste time sending (seemingly honest) idiots in jail.
Seems somewhat unfair to this guy but I guess that's how it is.
Nope. He's literally retarded. It's not unfair when a retard acts retarded, it's just how they act. Investing on less than long term basis without understanding how taxes work is retarded.
nah it's like when my dumbass was freelancing back in the day and loved the big checks and thought "we'll worry about setting aside taxes later." That's how you get to look at a nice large number on your tax return and go "wow this rocks" until you realize it's in red and has a - in front of it ;)
14 comments
1 SnapshillBot 2018-03-15
You probably don't get bussy because you're the type of guy who fucking nails his dick to a board
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1 PracticalOnions 2018-03-15
Magic beans prove once again to be the currency of the future™!
1 Stuntman119 2018-03-15
Cryptofacism is the future of the world economy
1 BIknkbtKitNwniS 2018-03-15
I thought you could also write off trading losses?
Seems fucked that if you win big you pay taxes but if you lose big you're still on the hook.
1 Mayor_of_tittycity 2018-03-15
A capital loss can only he used to write off losses in the current year up to $3000. That is you can deduct $3000 from your ordinary income. So say you sell some assets for 15k profit and others for a 30k loss. Your net capital loss is 15k. You are allowed to carry forward those losses at 3k per year and deduct it from your income in future years.
What is not allowed is using 2018 losses to offset 2017 income. So in 2017 you invest 20k and sell it for 120k, you owe taxes on 100k. You should have set aside part of that 120k to pay taxes. But like a retard, you reinvest it all. Now in 2018 your 120k is only worth 60k. So you sell that to pay the taxes owed off the 100k gain. You lost 60k on the sale. Congrats. You can now deduct 3k from your taxes for the next 20 years.
1 BIknkbtKitNwniS 2018-03-15
I see.
Seems somewhat unfair to this guy but I guess that's how it is.
1 IAintThatGuy 2018-03-15
To be honest he's quite retarded. Some people in the thread pointed out that whenever you make any gain, it's your responsibility to set aside the part that is due in taxes.
I know it's not intuitive for most people (who assume they can balance things over several years or whatever), but if you run a business or pay income tax it's exactly like that in most countries in the world.
Unless you have a specific tax status that allows you to spread losses or gains over several years.
For instance in most countries a writer who works years on a book and then gets all the profits in a single fiscal year might be allowed to spread the profits over several years of income to avoid hitting higher income tax brackets "artificially". But it always require some preparation, or at least some paperwork when you get the money.
You can't : make the money, reinvest 100% of the net, lose it, forget about it for a year, and expect the tax agencies to call it a wash.
Although most tax agencies in the world are able to work deals and payment plans for such situations, because it still happens (a lot) and they usually don't want to waste time sending (seemingly honest) idiots in jail.
1 InternetLawyerESQ 2018-03-15
Nope. He's literally retarded. It's not unfair when a retard acts retarded, it's just how they act. Investing on less than long term basis without understanding how taxes work is retarded.
1 Mayor_of_tittycity 2018-03-15
I feel bad for him. Cryptoshit is basically a fucking pyramid scheme. But he done fucked up bad.
1 JumbledFun 2018-03-15
nah it's like when my dumbass was freelancing back in the day and loved the big checks and thought "we'll worry about setting aside taxes later." That's how you get to look at a nice large number on your tax return and go "wow this rocks" until you realize it's in red and has a - in front of it ;)
1 JumbledFun 2018-03-15
well he's fucked
1 IAintThatGuy 2018-03-15
Figuratively. And if he ends up in jail for it, literaly.
1 wwaalleess 2018-03-15
Step 1 is obviously ask 14 year olds on Reddit for tax advice so good thing that one is covered already.
1 IAintThatGuy 2018-03-15
Imagine his first day in federal jail, when he has 3 cellmates with gang face tattoos.