Gyroscopic Investing

I own an LLC filing as an s-corp and have about 70k in unrealized losses in an old portfolio. I'd love to harvest the losses but I don't have any gains elsewhere to set them off against. My CPA kind of sucks right now. Are there any strategies for taking the losses and maximizing the write off?

I'm not a CPA.  And I have no clue about how the LLC and s-corp will affect things.

I do know that an individual can carry losses forward indefinitely to offset gains in future years.  I still have a big chunk of capital losses from my pre-PP days that I get to use every year -- Turbotax tracks it for me.  You can also apply $3k of that loss each year to offset income and not just capital gains. 

That said, don't take my word for it.  Definitely get a professional opinion before doing anything. 

Not a CPA either, but I don't know of any mechanism to write off portfolio investment losses against business income. You can write off investment losses against investment gains and you can write off up to $3,000/year against ordinary/business income.

I am a retired CPA that had an individual tax practice up until 8 years ago.  I wasn't Into corporate tax, but you might
want to Google section 1244 stock losses. For some cases this section of the tax code allows you to treat small
business losses as ordinary.This means if you satisfy the requirements, you can offset a lot of your other income.
I am a bit rusty, and this wasn't my area of expertise; but you ought to check it out.  I would recommend hiring a CPA
who is familiar with the rules.  This could possibly save you a lot.
Norm

The IRS seems very ornery these days so I'd be careful. I am trying to claim a loss on the value of my home due to Superstorm Sandy on an amended return as per their regulations and they are delaying and obfuscating. One of the things they are asking me for are newspaper clippings to prove that the disaster happened. They don't even answer the phone anymore. And they've managed to take 8 months to ask me for these things!

Sorry I should have clarified. The losses are as an individual, but I do own a business as an LLC. I am starting another small business this year, if there were a way to have that income come as capital gains couldn't I use the losses in the individual investing account to offset them?

Matthew19 wrote: I own an LLC filing as an s-corp and have about 70k in unrealized losses in an old portfolio. I'd love to harvest the losses but I don't have any gains elsewhere to set them off against. My CPA kind of sucks right now. Are there any strategies for taking the losses and maximizing the write off?

our real estate partnership is set up as an LLC  .  the LLC  merely passes through to you  all gains and losses like it was transparent itself. it can't convert regular income in to tax favored income .

  you are only allowed 3k of those losses applied to regular income.  the rest of the loss can only be applied against  other capital gains or it gets carried over to next year where you can try again.

you can't take regular income items , call it a dividend and try to write it off with an llc.

Gentlemen,

How do you set up an LLC?  I imagine through an attorney.  What are the costs and benefits?

I have heard of of-shore LLCs in Nevis.  So again, what are the costs and benefits?

Thanks.

Re answering the phone at the IRS:

Generally they answer the phone up to a month after April 15.  After that it's irs.gov.

I have found them to be helpful and courteous.  I've even talked to real people by digging and got assistance with tangled issues- my fathers estate return, for one.  Also, every other year they always ask for more info or, My favorite: "you owe more money- fill out and submit Form… and we will recalculate your refund."  I figure this is a positive experience compared to dealing with Louis XVI while being in the Third Estate.

Curiously, the IRS phone reps have shared a few laughs with me.  Must be that parallel universe stuff.

Cheers.

A favorite piece of mail correspondence concerned the child tax credit:

Dear Taxpayer:  You do not qualify for the Child Tax Credit this year.  We have changed your prospective refund to a burden on you.  Pay up!  We slapped some interest on the bill to make it worth the effort but, still… Pay Up!

Conclusion: when I read the directions properly, things are pretty smooth.

One recommendation:  when mailing on, or just before April 15, it is worth getting some sort of signature confirmation.  Though mailed early one year, my 1040 got misplaced and I had to pay a couple of bucks in a late fee.

As said above, I have found the IRS to be straightforward and reasonable.

And a good morning to you all.