I think I've got it, now

[wrog]

Just in case you were wondering, things happen in this order:

• ST carryover loss becomes* ST loss
• LT carryover loss becomes LT28 loss
• ST loss kills LT gain (i.e., just the net part: LT28 gain first, then LT25 gain, then LT15 gain), then kills ORD3000**, then carries over
• LT28 loss kills LT25 gain, then kills LT15 gain, then becomes LT loss
• LT25 loss kills LT15 gain, then kills LT28 gain, then becomes LT loss
• LT15 loss kills LT28 gain, then kills LT25 gain, then becomes LT loss
• LT loss kills ST gain, then kills ORD3000, then carries over
• ORD loss kills LT25 gain, LT28 gain, LT15 gain, and QDIVs in that order
• 15%MAGIC*** turns LT25 gain ordinary (15%), then turns LT28 gain ordinary (15%), then kills (as of 2008) LT15 gain and QDIVs

Looks like nearly all of these clauses will be coming into play in the coming year.

I particularly like the nasty features of LT28 gain (the sort you get from investing in gold): if you can't hit it with losses or 15%MAGIC, then it gets taxed at 28% even if you're not in the 28% bracket. Fortunately, we seem to have some losses.

In other not entirely unrelated news, the Icelandic Krona is still not trading. Wheee.


(*) where applicable, "becomes FOO loss" means "kills FOO gain then becomes FOO loss"
(**) ORD = all of your other income minus deductions and exemptions,
ORD3000 = ORD with the exemptions added back, if that's a gain, but then capped at 3000
(***) 15%MAGIC is the top of the 15% bracket minus ORD gain, if that happens to be smaller

Comments

[nosrednayduj]

But what does "kills" mean in this context?

[wrog]

"Xloss kills Ygain" ::= { T = min(Xloss,Ygain); Xloss -= T; Ygain -= T }

where losses are expressed as positive numbers.

[sirlyric.livejournal.com]

This crap is why I pay for TurboTax.

[wrog]

TurboTax may implement the calculation,
but that doesn't tell you what the calculation actually is
which makes it kind of useless for planning.

(unless TT has decided to become open source,
which, last I checked, seems rather unlikely... )

[sirlyric.livejournal.com]

You're right about that. My stuff's simple enough and I don't really move money around. -Is- there a good package you know of for planning this sort of thing, actually?

[wrog]

short answer: no

but I'm not the best person to ask about this since I tend to like rolling my own anyway.