Community Guru
Juvy Ann P Member Since: Oct 29, 2015

I have questions.  The ITR has a category named "losses".  How is this accomplished using the transactions report?  Does this refer to potential "cash on hand"?  If I had a fixed price contract but the funds did not become transformed into cash, do I consider this as a loss?

 

I did try to search the web for answers.  And these are the things that I found:

 

1.  If the security or investment is sold for less than its original purchase price, then the dollar amount of difference is considered a capital loss.  If the project is supposed to be won at $200.00 and I end up getting only the first milestone accomplished within the deadline set by the client and this milestone has made me earn $50.00 then I had a capital loss of $150.00.  

 

2. Capital losses can be reported as deductions.  So I need to declare $150.00 as one of the deductions.

 

3.  Some losses are realized.  Others are unrealized.  The latter do not need to be reported in the tax return.  How come I failed to realize the latter? Are there accountants on board?

 

 

Reference:

 

Cussen, M. P. 27 June 2013.  Capital Losses and Tax.  Retrieved from https://www.investopedia.com/ (Date accessed 26 December 2018).