For the last few years, majestic stock market returns have led investors to pay taxes on billions of dollars of profit. Investment losses are first used to offset any capital gains you realized during the year.
Any leftover loss is carried over to be deducted next year.
You can't deduct a loss until you sell the investment. Your gain or loss is based on what you originally paid for the investment, not on what happened to the value during 2000. The Kiplinger Washington Editors, Inc.