Complicated questions: Possible to offset profit from a company sale (as equity investor) with stock losses?

Archived From: Finance
  • Page :
  • 1
  • Text Only
Voting History
rated:
These are questions to which I have been unable to find an answers to. Also, I will be speaking hypothetically and with made up figures.

Scenario 1: Let's say my friend has 50k in stock losses from a stock he had that went bankrupt. Under the assumption of a realized loss, he can use 3,000$ per year until all 50,000$ of loss is "used up", roughly 17 years. Correct right?

Scenario 2:
A. Let's start the same; friend has 50k in stock losses. Now let's say he has another stock the next year that shows a 20k gain. He sells. Now he has "used up" 20,000$ of losses leaving him with 30k. On top of that, he can also deduct an additional 3,000 loss, thus leaving 27k. Correct?
B. Same thing, friend has 50k stock losses. Let's say he gets an annual dividend on 3 stocks which total 10k. Do dividends act the same, meaning can they be used to offset stock losses? Or is it only the sale of the stock that reduce the stock loss number. In the case of dividends being treated differently than a realized gain on a stock, he would be better off trying to find a growth stock rather than dividend stock if his goal was to reduce his stock loss amount correct?

Scenario 3: Same deal. Friend has 50k in stock losses. He also owns 20% of a company. If in 2 years the company gets sold and he gets a check for 50k for his 20%, can he not pay any tax on that and effectively use his stock losses against his 50k check from the sale of the company?

Thanks for any and all help

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

A. Yes
B. No
Scenario 3 Yes, assuming that they payments were all for capital gains

Note: Interesting numbering system



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017