RadioBDC Logo
Grrl Power with Steph Mangan | RadioBDC Listen Live
 
 
< Back to front page Text size +

Losses in Fannie Mae Stock

Posted by Jamie Downey  April 16, 2009 10:00 AM

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

I purchased $6,400 in Fannie Mae stock that is now worth about $100. I thought Fannie Mae was financially sound based on comments by my Congressman Barney Frank who said right before its collapse “These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis." This was my mistake and one I have to deal with. What, if any deduction can I take on my tax return for this loss?

Investment property that you own is considered a capital asset. When you sell a capital asset, you incur a capital gain or loss based on the difference between the amount you received when you sold the asset and your cost basis (typically the amount you paid for the asset). In your case, once you actually sell the stock, you will have incurred a capital loss of approximately $6,300.

Assuming you sell the stock in 2009, you will be able to offset the capital loss from the Fannie Mae stock with other capital gains that you may have. If your capital losses exceed your capital gains, you can deduct up to $3,000 of capital loss in any single year. In your case, if you have no other capital gains in 2009, you will be able to take a deduction from your taxable income in 2009 for $3,000. The remaining loss of $3,300 will be carried forward to your 2010 tax return. In 2010 you will be able to use this carryforward loss to offset any capital gains and take up to a $3,000 loss.

As a side note, you should write to Barney and ask him for a government bailout. Banks that held Fannie Mae stock received bailout money. No reason individual investors should be left out in the cold.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

E-mail your question

Name:
E-mail:
Your question/comment:
archives