Q. How does one take advantage of a capital loss on New Jersey state tax returns?
— Trying to file
A. There’s a big difference between what you can do on your federal and New Jersey returns.
On your federal 1040, you are able to deduct capital losses against capital gains, plus an additional $3,000 worth of losses against other income, said Alison Hall, a certified financial planner with Stonegate Wealth Management in Oakland.
Net capital losses can be carried forward to future years until they have been used up, she said.
On your New Jersey return, however, you are only able to deduct capital losses against capital gains.
“If you do not have capital gains, you cannot deduct losses,” Hall said. “New Jersey does not permit taxpayers to deduct losses against income from other categories, such as wages, pensions or interest.”
Additionally, unlike with federal returns, excess capital losses are not permitted to be carried forward.
Good luck completing your tax returns.
Email your questions to moc.p1540233001leHye1540233001noMJN1540233001@ksA1540233001.