Word: loss
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Dates: during 1990-1999
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...schedules as quickly as possible. Don't rush them, he urged; cherish them. Small wonder, then, that for millions of parents who followed Dr. Spock's advice with their children, who then did the same with theirs, news of his death last week at age 94 felt like a loss in the family...
...might expect, there are some hidden gems in all this confusion. When offsetting capital gains with capital losses, you must match rates where possible. So if you sold a long-held stock at a loss before May 7, where the 28% rule applies, you're obliged to use it to offset any gains where the 28% rule applies. But, notes Jere Doyle, an estate-planning manager at Mellon Private Asset Management, if you have losses in excess of any gains at a given tax-rate level, you can use those losses to offset gains at another tax-rate level...
That gives you the chance to mismatch a long-term loss with a short-term gain and generate greater tax savings. Say you're in the top 39.6% tax bracket and have no short-term losses but a short-term gain of $1,000. You also have no long-term gains but a long-term loss of $1,000. That long-term loss offsets your short-term gain, rubbing out a $396 tax bill. If you had used the long-term loss against a long-term gain, where 20% is the tax rate, you would have rubbed out only...
...late now to fiddle with your '97 portfolio. But by examining your records closely, you may find room to mismatch gains and losses in your favor. Remember, though, that you can use any capital loss (as long as there are no countervailing capital gains) to offset up to $3,000 of ordinary income in a given year. That's generally the best way to use a loss...
...provision, but victims of natural disasters (El Nino victims, listen up!) are eligible for special tax relief. They can deduct losses incurred in '98 on their '97 return. To do so, they must be in a federally declared disaster area. The move fast-forwards your refund by a year. But there are income limits. If you expect to report dramatically lower income in '98, you may be able to deduct more of your loss then than you can on the '97 return...