The capital gains and losses are integrated in the taxable base of the saving. When the balance of this type of income is negative, it can be offset against the positive balance. For example, this would happen when a property was sold below its cadastral value, losing patrimonial value in this operation.
Since tax reform came into force in 2015, some doubts have been kept as to the deadline for doing so and what percentage of compensation should be applied this year 2017. In this article we solve them so that you understand these doubts in order to clarify them before the end of the deadline to submit the income tax.
How to compensate capital losses
All increases and decreases in equity due to the fluctuation of the economy can compensate each other, regardless of their typology. Even so, property losses can only be offset by income from movable property or savings. It cannot be done with the income derived from work as was done before the tax reform.
Once the theory is explained, how do I compensate for capital losses? If the balance of the integration and compensation of this type of income is negative, its amount can be offset by the positive balance of the other component of the taxable income, the return on the capital stock, with a percentage limit that we will see below.
Percentage compensation for equity losses in 2017
The tax reform marked a transitional period before applying the percentage of definitive compensation, which will be 25%. In 2015 the percentage was 10%, in 2016 15% and this year 2017 will be 20%.
Term to compensate for capitat losses
The yields on the capital stock (dividends, interest, etc.) are offset against each other and, if there is a negative balance, 20% of that balance can be offset against the capital gains, and the remainder in 4 years. That is, if in an exercise we only have losses, these will remain outstanding and can be offset with earnings for the next 4 years.
Final advice on compensation of economic losses
We want to say goodbye with a trick that can be useful. If you plan to have a significant capital gain, try to sell some assets (stocks, shares, mutual funds, etc.) at a loss. In this way you will not tax the profit.
For other personalized advice on your current assets, do not hesitate to contact GM Tax. We adapt to your case and we advise you to find the solutions that best benefit you when it comes to offsetting property losses by making use of our experience. Call us!