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Friday, December 23, 2022 2:01:07 PM
https://www.fool.com/knowledge-center/how-much-to-write-off-on-your-taxes-with-a-loss-in.aspx
Under the tax code, investors can write off any amount of losses against their gains. Thus, if you lose $50,000 on one stock and make $50,000 on another, these gains and losses will offset each other. You won't owe any taxes on your $50,000 in gains because of your equally sized losses.
If your losses exceed your gains, you can write off up to $3,000 of the excess losses each year against your income. Thus, suppose you lose $53,000 on one stock and gain $50,000 on another. The gains and losses cancel out up to $50,000. The remaining $3,000 can be written off against your ordinary income during the year.
If your losses exceed your gains by more than $3,000, you'll have to carry your losses forward to future tax years. Thus, it's possible that if you take a very large tax loss in one year, you'll be able to write off a portion of your losses for years and years to come.
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