[GNC] how to record tax credit for capital loss

[Patrick James]

You mention picking the earliest year to minimize the tax liability (i.e. maximize the loss matching), but within a window of time.

> On 01/24/2024 7:53 AM PST Mattia Rizzolo <mattia at mapreri.org> wrote:
> 
>  Besides, one offests losses by fist pickin the
> furtherst year first, so it's good to know how much is left to offset
> from each given year for each broker (it's common practice in Q4 to look
> at what's left over from 3-4 years before and evaluate what to do to not
> lose the credit).

The normal balance is CR in the equity account, but for tax purposes you're looking for a zero/DR balance. According to what you're suggesting, you can match current CRs (gains) to past DRs (losses), but you can only offset the DR balance within a given window of time (and there are some tax reporting periods in this discussion).

So if you have a DR balance in your Brokerage 1 2020 account, then you'd credit that account if you sold for a gain today, until the account balance is zero, and then you'd credit 2021 for the leftover CR amount, up to the 2021 DR balance, and so on and so forth.

Eventually you'll run out of gain, or you'll have to credit the remaining CR balance to the current year account (Brokerage 1 2024), which you might be able to offset with a future DR, if you sold something for a loss, and that future transaction meets the right windows of time.