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My answer is yes and yes as per Biz and Vet's replies. Losses posted for a fiscal year can be written off against gains made in the same year. For instance I have keeper stocks that made a few bucks in profit (really!). There have been a few that bombed (no, I'm not kidding!). The profits made (from the good stocks) can then be subtracted by the losses (from bad stocks). There are shades of gray as you might imagine such as previous years when I did this same thing that have rolled in to this year as well as any fluctuations we've had in gross income due to my rehab, etc., more on that later...

Selling a stock from the previous purchase price can require a bit of research but it has truly saved me many thousands in the past. Purchase price of a stock I purchased in, for instance, 1989, may have split twice, been assumed in a merger, dipersed in part or any combination of any number of things. Doing the math all the way through from initial purchase price to the adjusted selling price could save you some serious cabbage and I highly reccommend this homework if you think it may apply to your portfolio. Also, if you sell a stock, you are only required to pay taxes on the portion of it that you actually earned as a profit (or deduct it as a loss). For instance, if you bought a stock at $10 per share and sold it at $25 per share, you are only required to pay the tax on the $15 portion of the value of the stock. You already paid the taxes on the $10 portion of the value of the stock when you bougth it (as earned income), you then only owe the IRS the taxes on the portion that was gained as profit.

We're all licking our wounds, yes? Don't pour salt in them if you can avoid it. Check in to adjusted selling price against initial purchase price - it may darn well be worth your while.

Also factoring in to the Melrose equation has been a dispersal of my father-in-law's estate, gifts as cash directly to me (tax dodge for Papa Melrose...don't ask) and a custodial account set up for Melrosette as a cash deferred annuity. We also unloaded a 401(k) that, if we were not careful, could have been viewed as income by the IRS (even though it lost value in FY '07-'08) but instead is now rolled over into both a Roth IRA and a different custodial account in AT&T preferred stock purchased from (you guessed it) Papa Melrose. This is done to protect Papa from getting nuked on some of his retirement that had to be dispersed by his age 72.5 years. Cash gifts can be done once a year as tax free to the recipient (there are rules to follow so be careful on this one and the rules vary from state to state so consider this for state filings as well as for the Fed).

One more thing is all of the medical bills we had for my alcohol treatment programs which is way in to the 10's of thousands including prescriptions. This can be a hardship against TBH's income, lost wages due to illness, unemployment that will be tax free and even the gas to and from rehab and related Dr.'s appts. are deductable. These same deductions can be applied for almost any health related illness or disability so check out the allowances if you think this may apply to you.

Whew...All of that means Mr. Accountant earns his price tag as I would have no clue how to fill in the blanks on next year's return. I know the theory but not how exactly it needs to be filed. I'll save thousands by shelling out a few hundred to my CPA. Money well spent to say the least.

Not sure if all of this helps but it really does pay to get an accountant (at least it does for me). Besides, even his preparation of all of this crapola is a deduction on the following year's return anyway so you really only "pay" your accountant once, every year following is a deduction from net income.

Cheers,
Melrose