Can I Use Long-Term Losses On Stocks To Offset Short-Term Gains In Real Estate?
(MONEY Magazine) – Q. Last year, I flipped a piece of real estate after just four months. Now I have a short-term gain of $40,000. Can I use my carryover of long-term capital loss ($15,000) on stock sales in 2001 to offset my real estate gains? JOHN KELLY PHILADELPHIA
A. The short answer is yes. The IRS isn't concerned about which investments generated your losses or gains as long as they were legitimate and you follow a few simple rules: You must match each type of carryover (also called carry-forward) loss to offset the same type of current gain: long-term losses against long-term gains, short-term losses against short-term gains. After that, you can use any leftover losses first to offset current long-term gains and then to offset short-term gains. Finally, any remaining losses can be used to offset $3,000 of this year's ordinary income. And, of course, it's important to remember to repeat this process every year until you write off all of your loss.
Q. If I buy US Airways stock while it is in bankruptcy, will my shares transfer over to a new ticker symbol when it emerges? JOEL JARMEL MADISON, WIS.
A. Not necessarily. After US Airways filed for Chapter 11 bankruptcy, it stopped trading on the New York Stock Exchange (NYSE) under the ticker symbol U. It now trades over the counter with the symbol UAWGQ, recently at 60[cents] a share. (See www.pinksheets.com.) The company has announced that a reorganization could result in the cancellation of all existing stock. And even if US Airways emerges from Chapter 11 and doesn't cancel the stock, there's no guarantee that it would resume trading on the NYSE or that it would reclaim its old ticker symbol.
"In my opinion, the stock is worthless," says Ray Neidle, an airline analyst from Blaylock & Partners, a New York City brokerage/investment bank. In that case, it doesn't matter what symbol it trades under.
Q. After 30 years of receiving disability checks from Social Security, my mother started working again in her late fifties. Unfortunately, she may need to go back on disability. She's trying to find out how much she would receive, but each time she contacts Social Security, she gets different answers, ranging from $600 to $1,800 a month. How does this work? KAREN LARKIN TULSA
A. To determine how much a person who qualifies for disability would receive, the Social Security Administration takes into consideration the following factors: the number of years worked, salary and the age or ages at which an employee was deemed too disabled to work. Like all adults 25 years old or older who aren't already receiving benefits, your mother should get an annual statement from Social Security that estimates her retirement benefits as well as the amount she would be eligible for if she became disabled again.
But your mother's case could be complicated, says Mark Buchner, a disability lawyer in Tulsa. "She should definitely visit the local Social Security office," Buchner advises. "Don't call the toll-free 800 phone number. The answers are notoriously wrong a good deal of the time." The nonprofit Independent Living Research Utilization (www.ilru.org; 866-478-6878) can also direct you to a local source of reliable, free advice. One in Tulsa: Ability Resources (www.ability-resources .org; 918-592-1235).