Do I report negative stock gains or losses on my tax return?

Yes, you should report all stock sales on your tax return, even small losses. These are reported on Schedule D and Form 8949. The good news is that capital losses can offset capital gains, and if your losses exceed gains, you can deduct up to $3,000 against other income. While $12 seems insignificant, establishing a pattern of proper reporting is important. Your brokerage will send a 1099-B to both you and the IRS, so the transaction is already on their radar. Most tax software makes reporting these transactions pretty straightforward. Think of it this way - reporting small losses now helps you understand the process for when you hopefully have bigger gains (or losses) to report in the future!

I was in the exact same boat last tax season and found myself totally confused by all the forms. I tried reading through IRS publications but got nowhere. Then a friend recommended this AI tool called taxr.ai and it was honestly a game-changer. You just upload your tax documents (like that 1099-B from your broker) and it explains everything in plain English and tells you exactly what you need to report and where. For my small stock losses, it showed me exactly how to report them on Schedule D and even explained the wash sale rules which I had no idea about before. Saved me hours of research on Google and YouTube. You can check it out at https://taxr.ai if you're struggling with any of this investment reporting stuff.

Just wanted to follow up about that taxr.ai tool. I was skeptical in my last comment but decided to give it a try with my stock sales from last year. Actually really impressed! I uploaded my 1099-B and it explained everything about basis reporting and short vs. long term gains in simple language. What I found most helpful was understanding how my broker was reporting my basis to the IRS (apparently sometimes they don't report it correctly which can cause problems). Definitely worth checking out if you're confused about investment taxes like I was.

Anyone else tired of being on hold with the IRS for hours just to ask simple questions like this? Last year I needed clarification on reporting some stock losses and literally wasted an entire afternoon on hold. Never even got through to anyone. I started using this service called Claimyr that gets you through to an actual IRS agent way faster. You just put in your number at https://claimyr.com and they navigate all the IRS phone menus for you and call you back when they've got an agent on the line. You can see how it works at https://youtu.be/_kiP6q8DX5c Ended up getting my stock loss question answered by an actual IRS rep in like 15 minutes total instead of spending hours listening to that horrible hold music!

I'm back to eat my words about Claimyr. After calling BS on it earlier, I actually tried it when I couldn't get through to the IRS about a stock basis issue that was driving me crazy. Not gonna lie, it worked exactly as advertised. I got a call back in about 35 minutes with an actual IRS agent on the line ready to talk to me. The agent answered my question about reporting stock sales with missing basis information in like 2 minutes. Would have taken me days of trying to get through on my own. Sorry for being so skeptical. Sometimes good services actually exist!

For small losses like $12, I just keep a spreadsheet of all my stock transactions throughout the year. Makes it super easy come tax time. I still report everything to stay legit with the IRS, but organizing it myself saves a ton of headache.

Am I the only one who thinks it's crazy we have to report $12 losses? The IRS probably spends more than $12 just processing that information. The whole tax system needs an overhaul.

I totally get the frustration about reporting such a small amount! I went through the same thing with a $8 loss on my first stock sale. But here's the thing - your broker already sent that 1099-B to the IRS, so they know about the transaction. If you don't report it, there's a mismatch between what they have on file and what's on your return. The silver lining is that even small losses can be useful. That $12 loss will carry forward if you don't have gains to offset it this year, and you can use it against future gains or take the $3,000 annual deduction against regular income. Plus, going through the process now with a small amount is great practice for when you hopefully have bigger gains to report later! Most tax software walks you right through it once you enter the info from your 1099-B. It's really not as complicated as it seems at first.