Save Money The silver lining in a very bad day? Tax breaks
Tax rules are not on the list of things most people turn to for comfort after a bad day. But they can take the sting out in a few cases. 1: Someone stole your stuff The good news: Theft losses that your insurance company doesn’t reimburse you for could be tax-deductible. The rub: The loss has to be sizable for the math to work. If thieves steal your uninsured $5,000 ring but your adjusted gross income is $75,000, for example, you probably can’t take the deduction.
2: You lent money to a friend or relative who never paid you back
The good news: You report it as a short-term capital loss on your tax return. The rub: You need written proof of the loan. 3: You gambled and lost The good news: You may be able to deduct your gambling losses if you itemize your deductions when you file your tax return. The rub: You can’t deduct more than you win. 4: You sold your stock investment at a loss The good news: The IRS lets investors use capital losses to offset taxable capital gains, which means a $5,000 loss on a stock you bought could offset a $5,000 capital gain. The rub: If your losses exceed your gains, you could deduct the difference, but only up to $3,000 per year ($1,500 for those married filing separately).