- 1). Locate your most recent brokerage statement and review the gains and losses in your portfolio. Many brokerage statements list the cost basis of each stock as well as the current value and the unrealized gain or loss. Call your broker if this information is not on your statement, and ask for the cost basis of each stock in your portfolio.
- 2). Evaluate each stock on which you have a loss and determine which you wish to sell. Log on to your brokerage account, go to the trading menu and enter a sell order for those stocks.
- 3). Keep a copy of the sales transaction for your records. You will need this sales transaction to substantiate the capital loss you claim on your tax return.
- 4). Download your tax forms from the IRS website, or obtain them from your local library or legislative office. You need form 1040 and Schedule D to report the loss.
- 5). Complete Schedule D. Provide the names of the stocks you sold, the cost basis and the amount of your loss. Report any capital gains on the same form. Transfer the total amount of gains and losses to the 1040 form and complete your tax return.
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