Does a long term capital loss offset capital gains distributions or short term capital gain first?
For a given tax year, if you have a short term capital gain of $1,000, a long term capital loss of $3,000 and capital gains distributions of $5,000, can the long term capital loss offset the short term capital gain or does it offset the capital gains distributions?
- Wayne ZLv 71 year agoFavourite answer
Distributions are considered Long Term so the Long Term loss offsets those first.
In your example, you would have $1000 in Short Term gains and $2000 in Long Term gains.
- Max HooplaLv 71 year ago
Long term offsets long term and short term offsets short term then the excess kicks in.
- STEVEN FLv 71 year ago
NO. Capital gains distributions are broken down into short term and long term capital gains, and treated EXACTLY the same as 'normal' capital gains of the same kind.
- EvaLv 71 year ago
Cap gains distributions