Members of the Maryland Association of Certified Public...

Tax questions

March 19, 1997

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: Assuming you have a long-term loss that exceeds the $3,000 you can claim each year, do you have to take that loss every year even if you find that you don't have to file at all? Can just disregard it for the year? Would you be able to claim the rest in subsequent years?

A: There is a "tax benefit" rule applying to the use of capital loss carryover. In years where your pre-capital loss taxable income is zero, you are deemed not to have used any of your capital loss. Caution: There is an exception to this rule, involving net operating losses and tax benefits. It is possible to have a partial "use" of your loss if your income is modestly low. Any capital loss that saves taxes is considered to be used and it is eliminated from the carryover.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial at 410-783-1800. Call 268-7736 in Anne Arundel County, 836-5028 in Harford County and 848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after you hear the greeting.

Readers also can e-mail questions through The Sun's Web site --

Selected questions will be answered in the Business section. No questions will be answered by phone.

Pub Date: 3/19/97

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