Short-Term Capital Loss

Short-Term Capital Loss

The loss one realizes by closing a position one has held for less than one year. For example, if one buys a stock or bond and sells it five months later for less than what one paid, the loss is considered a short-term capital loss. One may write off short-term capital losses against any capital gains.
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The components may include long-term capital loss, short-term capital loss, ordinary loss from operations, and investment-interest expense, and may also include items of income.
If you are losing money on an equity holding, you can put it to good use by selling within a year to book short-term capital loss.
They interpret this result as consistent with price reversal following a tax induced, year-end sell-off intended to ensure short-term capital loss treatment.
The company sold three of the notes and reported a net short-term capital loss for 1990 of approximately $85 million.
An investment gone wrong will result in a short-term capital loss.
In a somewhat related issue, consider what would happen if the mutual fund generated a net short-term capital loss instead of a short-term gain of $2,000 in the above example.
Short-term capital losses (including short-term capital loss carryovers) would offset short-term capital gains.
An opposite and less desirable result that might occur because of a wash sale is the conversion of a short-term capital loss into a long-term capital loss.
Under Internal Revenue Code section 166(d), a nonbusiness bad debt deduction is treated as a short-term capital loss, the value of which depends on the lender's investment and tax situation.
856(e)) would not be qualified income under the 75% income test; (3) long-term capital gain; and (4) short-term capital gain to the extent of short-term capital loss.
A business bad debt is an ordinary loss deduction; a nonbusiness bad debt is a short-term capital loss.
This resulted in a short-term capital loss of $5,663 and a long-term capital loss of $2,000 for the Technology fund and a short-term capital gain of $9,984 and a long-term capital loss of $4,708 for the Summit fund.