Stock Capital Loss

Capital loss is the difference between a lower selling price and a higher purchase price, resulting in a financial loss for the seller.The IRS states that "If your capital losses exceed your capital gains, the excess can be deducted on your tax return". capital losses can be deducted from their in kind capital gains. Long term losses reduced long term gains; short term losses reduce short term gains. capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor.Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.

If capital losses exceed capital gains, up to $3000 per year may be deducted from ordinary income. Any excess over $3000 may be treated as a capital loss carry over and deducted from future years' income until the total loss has been fully deducted. Unlike capital gains, mutual fund investors do not receive notice of capital losses. Instead mutual fund losses are carried over by the fund and reduce future capital gains distributions until the loss is consumed. It is important to analyze both the capital gains yield and the total return yield of an investment holding. Dividends are not to be counted in a capital gains yield assessment, but keep in mind that depending on the stock, dividends could comprise a substantial portion of the total return of the stock compared to capital gains.There are also several strategies or stock tips suited to beginners, such as diversification, tracking a market, and value investments which helps in calculating capital loss.


Capital gains may refer to "investment income" that arises in relation to real assets, such as property; financial assets, such as shares/stocks or bonds; and intangible assets such as goodwill. Many countries impose a tax on capital gains of individuals or corporations, although relief may be available to exempt capital gains: in relation to holdings in certain assets such as significant common stock holdings, to provide incentives for entrepreneurship, or to compensate for the effects of inflation.