How does capital gain/loss generated in my LLC taxed as a partnership effect my Individual Income Tax Return?
If an LLC taxed as a partnership generates capital gain/loss it passes that gain to the members and the members report the gain/loss on their Individual Income Tax Returns as capital gain/loss. This capital gain/loss is netted against other capital gain/loss the individual has; including capital loss carry forwards. If the net result is a gain the individual pays tax on the net gain. If the net result is a loss, up to $3,000 is deductible against other types of income and the remaining is carried forward as capital loss. Find more IRS rules for day trading and links to IRS resources.
