wmartin@brl-tgr.ARPA (Will Martin ) (05/28/85)
A query about the seemingly innumerable tax reform packages and proposals that get uniformly uninfomative news coverage these days: My current tax situation has, for the past 4 or so years, included a $3000 loss each year from a large loss we incurred when my wife tried to open and run a retail business. The tax laws have allowed us to write off this loss, but we are limited to writing off only $3000 per year from the total, and carrying forward the remainder to next year's return. I have seen no comments or explanations of the new tax reform packages which have ever mentioned this situation. I still have about three year's worth of $3000-per-year losses to finally write off this total amount. Now, I expect that, no matter what tax reform package ever gets adopted, it will not take effect for some time, so maybe this will all be written off under the current law by the time any such new system is adopted, so maybe this issue is really moot, as far as I am concerned. Nonetheless, others are in the same situation, and may have decades of $3000-per-year writeoffs remaining to use up. So, what I am asking is whether such reductions to income due to losses will be allowed under the tax reform packages, or by some and not by others? Can anyone give any detail on this subject? Regards, Will Martin USENET: seismo!brl-bmd!wmartin or ARPA/MILNET: wmartin@almsa-1.ARPA
dgh@sun.uucp (David Hough) (05/31/85)
In article <11085@brl-tgr.ARPA> wmartin@brl-tgr.ARPA (Will Martin ) writes: >A query about the seemingly innumerable tax reform packages and proposals >that get uniformly uninfomative news coverage these days: General circulation newspapers skip over most of the bad news in tax reform proposals since they do not directly affect most taxpayers, and the reporters don't understand the issues. > >My current tax situation has, for the past 4 or so years, included >a $3000 loss each year from a large loss we incurred when my wife tried >to open and run a retail business. The tax laws have allowed us to write off >this loss, but we are limited to writing off only $3000 per year from the >total, and carrying forward the remainder to next year's return. > Sounds like a capital loss carryover rather than an operating loss carryover which might be fully deductible immediately. I would guess that as long as capital gains are treated differently from ordinary income, capital losses will be carried forward. One possibility is that capital losses will not be allowed as deductions against income other than capital gains, which would mean that you would not be able to recover your losses by reducing ordinary income. You would have to find some capital gains. >Now, I expect that, no matter what tax reform package ever gets adopted, >it will not take effect for some time, so maybe this will all be >written off under the current law by the time any such new system is >adopted, so maybe this issue is really moot, as far as I am concerned. Don't count on it. The Treasury proposal had some provisions which were to be effective as of the date the legislation was introduced, rather than enacted. That had such a bad effect on the real estate industry that Congressional leaders had to hold a news conference to say that they wouldn't enact any such retroactive legislation. But you know the value of a politician's promise. The worst thing is that "our" elected representatives are perfectly willing to vote on such complex legislation without reading it, much less understanding it. So it is not surprising to read that an anti-loophole passed as part of ERTA due to a typographical error has never been repealed. The 1984 tax legislation was about 1000 pages of fine print. If something specific is important to you, you might write a letter to your congressman about a week after you send a large check to his re-election committee. This is now known as "obtaining access" rather than "bribery". David Hough
greenber@timeinc.UUCP (Ross M. Greenberg) (06/02/85)
Was it my imagination or did the Prez. state to Mondale during the
debates that he would see the tax rate rise "over my dead
body"??
Since I see the tax reform as effectively raising most peoples taxes,
I'm waiting Mr. Prez....
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Ross M. Greenberg @ Time Inc, New York
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I highly doubt that Time Inc. they would make me their spokesperson.
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"There's something wrong in the world. There's always been. Something no one
has ever named or explained" --- Francisco d'Anconia