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How to Report a Loss on a Stock Sale on Your Personal Income Taxes

1.

Download Form 1040, Schedule D from the IRS website. Schedule D is used to report both capital gains and losses. Loss on the sale of stock, which exceeds any gains you made with other investments, qualifies as a capital loss.

2.

Complete Schedule D. Provide information pertaining to assets which were sold during the tax year, including the date the stock was acquired, original price, date sold and sale price. This information will help you calculate your gains or losses.

3.

Transfer the information from Schedule D to Form 1040 or 1040NR. Report loss on a stock sale on line 13 if you're using Form 1040, and line 14 if using Form 1040NR. Losses which can be deducted are limited to the net loss, or $3,000, whichever is less.

4.

Determine if losses should be carried over to the next tax year. Considering the maximum loss which can be claimed is $3,000, some individuals may have losses beyond that to report. The Internal Revenue Service allows for losses to be carried over into the next tax year and beyond.



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