22 Jan What happens to charity deductions and capital losses for 2020?

Q. If you take the standard deduction on your federal tax return for 2020, can you still deduct charitable contributions and losses due to selling stocks?
— Taxpayer

A. There were several changes made in 2020 that could affect your federal tax return.

The Coronavirus Aid, Relief, and Economic Security Act, commonly called the CARES Act, was enacted in late March of 2020.

It allows individuals who do not itemize to claim a deduction of up to $300 for charitable contributions in 2020, regardless of filing status, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Holmdel.

He said the December 2020 COVID-19 relief package extended this provision to also apply in 2021, and it increased the 2021 limit to $600 for married joint filers.

But the rules for deducting capital losses are unchanged as a result of the pandemic, he said.

“After offsetting current year capital losses against capital gains, any remaining capital loss can be deducted up to $3,000 or $1,500 if married filing separately,”

Becourtney said. “Any capital loss exceeding the deduction threshold is carried forward indefinitely.”

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This story was originally published on Jan. 22, 2020.

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