Taxes (TAX)

[cintrix]

So.. if you have more losses than earnings then ya wont get money from the gov't and the losses of 3k plus additional losses will only carry over to the next year to help off set earnings (assuming you make money and will have to pay taxes the next year)?

I am not quite sure what you mean here. What do you mean you won't get money from the gov't? If you have losses that exceed gains you can write up to 3k worth (and I think it is half if you are married filing separately). That would be a 3k tax loss deduction. Whether or not you get money back from the irs all depends on your return - how much taxes you prepaid, your tax bracket, etc.

Next year, any excess losses over 3k can be carried over and you can use it against your gains/losses for 2011. So if your total loss for 2010 was 5k you would take a 3k deduction and carryover the 2k for next year. Say you made 3k next year - then you could use your carryover and only have to pay taxes on the remaining 1k.