Quote:
Originally Posted by red sky
How would I be taxed on the following situation.
If bought a stock in 2008, say 5,000 shares at $1.20 = $6,000
Then in 2009 bought another 3,000 at $0.80 = $2,400
If I then sold 3,000 at $1.00 in 2009 for proceeds = $3,000
So would I have a capital gain of $600 or a capital loss of $600 or do I do a weighted average and have no capital gains or loss?
Thanks!
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I'm no accountant, but this is what I think.
Your adjusted cost base becomes 1.05 after the second transaction. You then sell 3,000 shares at a loss of 0.05/share, so you've got a capital loss of $150 on the books.
I think you can use apply this loss backwards 3 years (someone will for sure clarify this for me), use it this year, or carry it forward indefinitely. It can only be used to offset capital gains, not earned income (salary, interest, etc).