If capital losses exceed capital gains, up to $3000 per year may be deducted from ordinary income. Any excess over $3000 may be treated as a capital loss carry over and deducted from future years' income until the total loss has been fully deducted.
Unlike capital gains, mutual fund investors do not receive notice of capital losses. Instead mutual fund losses are carried over by the fund and reduce future capital gains distributions until the loss is consumed.
Related Fool Articles
Recent Mentions on Fool.com
- 3 Easy Ways to Spring Clean Your Finances
- Travelers Companies Inc Earnings: Are Storm Clouds Looming?
- The Fed's Janet Yellen Could Be Annaly Capital Management's Best Friend
- Why Shares of Renewable Energy Group Inc Plunged Today
- Fool's Gold Report: Gold Falls Below $1,300 as Stock-Market Fears Subside
- Dow Ends the Week With a Loss; Chevron, Exxon Mobil Gain on Oil's Rise