How should I go about netting long-term and short-term capital gains and losses?
A. Here’s a concise explanation from our Tax Strategies area. Everything will boil down to one of four situations: 1) Long-term gain with short-term gain: Ahhh, investment nirvana! Everything nets out to a winner. The long-term gain gets the preferential rate of 10% or 20%, depending on your tax bracket. The short-term gain is taxed with your other income at your marginal rate. 2) Long-term loss with short-term gain: We have to look at two situations here. If the gain is bigger than the loss, you have a net short-term gain — taxed at your marginal rate. If the loss is bigger, you have a net long-term loss. Up to $3,000 of loss can be used to offset other kinds of income. Any unused amount will carry forward to the following year as a long-term loss. 3) Long-term gain with short-term loss: Again we have to consider two scenarios. If the gain is bigger than the loss, you have a net long-term gain and get to take advantage of the favorable rates for the net gain. If the loss is larger, i
