dankspeed
dankspeed HalfDork
12/27/20 7:43 p.m.

So I bought Ford and GE stock back when they were doing well and should have known that wouldn't last (and didn't). Since buying them in 2014 I've lost a considerable amount of money especially GE. I hung on to both just to make sure it wasn't a short term problem and now am ready to move on realizing I just need to take my losses and look for greener pastures.

 

That being said. Since I've taken a loss consistently damn near every year since buying is there any chance I'm going to have to pay taxes on this money? If so can I claim the loss to counter that?

 

I plan on taking the money and moving it into my roth IRA that's invested in an extended market ETA. The ford and GE stock are in my traditional IRA.

 

Hope that all makes sense...

 

Thanks!!

mtn (Forum Supporter)
mtn (Forum Supporter) MegaDork
12/27/20 7:51 p.m.

No, you won't be taxed. You're taxed for gains. In this case, it would be long term taxable gains, since it's over a year, but there aren't actually any gains to be taxed for.

 

Not a cpa. 
 

 

EDIT: I missed the part that it's in the IRA. You wouldn't be taxed for it now regardless, other than for the Roth conversion - and for that matter, the only thing that matters is the value at the time of conversion. 
 

still not a cpa. 

BoxheadTim (Forum Supporter)
BoxheadTim (Forum Supporter) GRM+ Memberand MegaDork
1/15/21 9:02 a.m.

Also not a CPA. However.

No negative capital gains tax (yet...).

The crux of the matter is that these investments are in an IRA, which means pre-tax money. Any withdrawal or Roth conversion attracts ordinary income tax. Are these shares all the money in that IRA, or is there more? I don't think there is such a thing as a "partial Roth conversion" - although I'd love to be wrong on that - so any withdrawal of part of the funds might be considered an early withdrawal if you're not 59 1/2 yet. There seems to be a provision in the CARES act that currently waives the 10% penalty you have to pay on early withdrawals on top of ordinary income tax. You do have to pay ordinary income tax on the money withdrawn or if you convert the whole IRA into a Roth.

Plus you might want to talk to a CPA rather than Internet Amateurs .

Duke
Duke MegaDork
1/15/21 12:09 p.m.

Also:

I'm not sure if this applies to IRAs, but there is a limit to how much loss you can write off in a given year.  You CAN, however, carry the excess loss forward to the next year until it is used up.

 

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