We Lost Over $300,000 Day Trading!!

liz is with us in illinois hi liz welcome to the dave ramsey show thanks hi dave how are you doing better than i deserve? and sixteen thousand dollars in capital losses we were told we could only deduct three thousand a year on our taxes but I did the math and that would take 115 years and I just hope I don't live that long, but our accountant said he suggested opening a brokerage account in instead of a 401k to use these capital losses and I just wanted to hear your opinion on this, so it sounds like the type of losses you have is what is causing the write-off, the inability to write them up because you don't have any income to be from similar sources to the big losses, yes, and that's why he's saying open a brokerage account because the income from that would then be tax-free using these losses to write them off, okay, exactly.

It will bite and I don't know, would you treat a brokerage like a 401k? You just let the money accumulate and then you put the money in a mutual fund and the problem is that if you put it in mutual funds, many of the gains may not be taxable because the growth in value is not taxable. until you withdraw them and therefore you will not get any use out of this brokerage account where you buy and sell stocks if you have a gain that is taxable in that year it looks like you have a short need short term income on investments, no long term capital gains on investments to offset this, what was this what is the loss from

trading

?

I'm doing exchanges Jesus, yeah, it was bad, it was It was a bad situation, my husband was diagnosed with bipolar, but not until after this happened and it all happened in six weeks, it was kind of manic, you know, I was very out of place and very disturbing and obviously what's your what? Your household income, um, last year, oh my gosh, this year it was only thirty-eight thousand, it's going up, my husband got a new job starting at fifty thousand, plus, you know, whatever boards you have, Three hundred thousand, you could lose, uh, we had an inheritance.

IRA and he was working, yes, and then he was originally. She had just had a new baby, okay, a big earning pregnancy, so she started working from home because she was doing well until you know, yeah, until she wasn't and so now she's been crying, the seventy and eight percent of day traders lose money statistically, that's called everyone, okay no, don't even say that thing about doing well again, it's like saying I'm at the roulette table and I hit it , so I'm doing fine, yeah, yeah, okay, let's stop for a second, the inherited IRA was taxable, you took the money out and paid taxes and then you

lost

it.

I said, yes, because the inherited IRA is taxable when you withdraw. Yes, that was bad, well this is the problem we have if we go so far as to weave C with nuances and techniques to gain some benefit from this cancellation, but it exposes him to the same beast that almost killed him the first time. I don't like that, so the fact that her husband is anywhere near a brokerage account sounds like suicide to me, so that's what a brokerage account is. A brokerage account is an account you have with a broker that you call and make trades with.

What the answer is is no, her husband doesn't need to be around that, so I don't know in their household how they are going to generate investment gains to offset investment losses and get the benefit of this which is substantial. I don't know how to do that, what I would do if I was in your shoes before, before I put your family at greater risk by playing with the same snakes as you already, I would just say screw it, forget it, it just left, yeah, it's okay , but Yes, but before we do it completely, I want to ask a question, if I'm you, because there is $300,000 on the loss table that would be good to protect income with.

I want to ask a different tax advisor than the one you have. I wonder what other accounts qualify, what other investments qualify for this right, the returns from them qualify to offset this loss. I think that even though you probably got pretty decent advice in terms of what technically applies, it was bad advice when you step back and understand. the situation, but your husband doesn't need to be around a broker, manic-depressive people shouldn't trade, hello, you don't know anyone, no one should, but bipolar, you sure shouldn't, so I'm really sorry, what a horrible thing. "We've all been thinking, well, we're getting over it, there was some debt that played into a lot of our marriage.

I'm here, there's this guy who's strong, you know, we're going to therapy. I'm very supportive of him, she's recovering from the bridge where you hit him, okay, oh lord, I can't even imagine, I'm so sorry, oh yeah, let's do this, let's do this, let's say it out loud, let's say it out loud that your accountant may have given you some good tax advice but bad mental health advice. Great, stay away from a brokerage now, but let's also double check and get a second opinion and some other possible options, if there are any that are safe and away from the snakes that have bitten you. before, where you could get this right away, but before opening a brokerage account you would just lose the money, it's just part of the sadness of this whole situation, thanks for the call anytime, every time you try to short circuit the process, an accumulation of wealth is

lost

at any moment, it doesn't matter if you are bipolar it doesn't matter if you are the type it doesn't matter you are the number of the Enneagram the one who rushes to be rich will not go unpunished I did it her husband did it don't do it