Your accountant is either misinformed or he explained it incorrectly to you.Even many stock brokers don't understand this fully.
If you lost $1,000,000 on MDFY in real losses, after selling, you can only take $3,000 loss per year against ordinary income, but if you happened to make a $1,000,000 realized profit after selling on a stock like BKMP, or PYPR, then you will NOT have to pay any short term or long term capital gains against your profits since you can offset all of it by your MDFY losses!
Wow, there may actually be a silver lining after all, hahaha....
Here is another posted opinion regarding the same issue:
Posted by: Dwudman
In reply to: verylongonmfys who wrote
Date: 12/27/2006 3:17:54 PM
Post #14987 of 15278
Doc...for the clarification of anyone hearing this for the first time...one may write off capital gains against capital losses in a current or subsequent tax year, true. However, one may NOT write off more than $3,000.00 per year in capital losses against ordinary (earned) income...big difference.
So now all we have to do is find a real stock to make us all gains.
Disclaimer: You are completely responsible for your own investment decisions and who and what you believe on the boards.You are responsible for properly analyzing and verifying any information you choose to rely upon.
Doc
