---
title: Can Capital Losses Offset Dividend Income?
description: Capital losses result from the sale of a capital asset for less than the basis.
image: https://www.realized1031.com/hubfs/Imported%20sitepage%20images/money-house-seesaw-IS-1048402108.jpg
---

[![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/)

- [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap)
- [Our Process](https://www.realized1031.com/how-realized-works)
- [Financial Advisors](https://www.realized1031.com/advisor)
- [Resources](https://www.realized1031.com/resources)

- [The Company](https://www.realized1031.com/about-us)
- [Articles](https://www.realized1031.com/blog)

[Register](https://www.realized1031.com/marketplace)

[Log In](https://www.realized1031.com/login)

- Better Business Bureau Rating: **A+**
- [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333)
- [Call](tel:1-877-797-1031) **(877) 797-1031**

# Can Capital Losses Offset Dividend Income?

Posted Nov 29, 2023

![money-house-seesaw-IS-1048402108](https://www.realized1031.com/hs-fs/hubfs/Imported%20sitepage%20images/money-house-seesaw-IS-1048402108.jpg?width=750&height=501&name=money-house-seesaw-IS-1048402108.jpg)

Capital losses result from the sale of a capital asset for less than the basis. For example, if you buy stock for $1,000 and after holding it for two years you sell the stock for $500, you have incurred a $500 capital loss. In contrast, if you buy the stock for $1,000 and after holding it for two years you sell it for $3,000, you have earned a capital gain of $2,000.

Capital gains are taxable. The rate imposed depends on whether the gain is considered long or short-term. The threshold for long-term capital gains is one year. If you earn a short-term capital gain by selling an asset you have owned for less than one year, the amount gained will be taxed at the same rate as your ordinary income (wages, for example.) However, if you earn a long-term capital gain by selling an asset you have owned for more than one year, the amount gained is taxed at a lower rate, which currently won’t exceed 20 percent.

### How do I offset gains with losses?

First, consider the[ total capital gains and losses](https://www.realized1031.com/blog/do-you-have-to-report-capital-losses) incurred in the relevant tax year. Remember that capital gains and losses come from selling capital assets, including stocks, bonds, and property (both personal and investment property qualify.)

If you sell several assets and incur $10,000 in capital losses and $20,000 in capital gains, the amount of the gain that is subject to taxation is reduced by the amount of the capital loss. But suppose that you have $30,000 in capital losses and $20,000 in capital gains. First, you won’t pay capital gains taxes on the $20,000 you gained.

Also, you still have $10,000 in losses to use in a manner that positively affects your tax obligations. If you have no other gains in that year to offset, you can offset $3,000 of other income. The $3,000 may include dividend income as well as wages or other taxable income. If you had dividend income of more than $3,000, you would owe taxes on the amount over $3,000.

### What is a wash sale?

A[ wash sale](https://www.realized1031.com/blog/what-is-an-example-of-a-wash-sale) refers to an investor selling stocks at a loss and purchasing the same (or even a substantially similar) stock within 30 days before or after the sale. The IRS considers this tactic a means of engineering losses and does not allow the investor to use the loss to offset gains.

### How is dividend income taxed?

Some[ dividend income](https://www.realized1031.com/blog/are-stock-dividends-taxed-as-ordinary-income) is taxable at the ordinary income rate, while most of such income is taxable at the capital gains rate. The difference is whether the dividend is qualified or not. Most dividends from US-based companies (and some foreign corporations) are qualified and taxed at capital gains rate as long as the investor has owned the shares during the 60-day qualifying period (before the dividend is announced) and has not hedged their position during that time.

### What about the balance of capital losses I could not offset?

If you have higher capital losses than gains, and you use $3,000 to offset ordinary income and still have losses remaining, you can carry them forward. You can then use these carryover losses to offset capital gains in another tax year. Remember that all capital gains and losses realized in a tax year must be reported on your tax return using IRS Form 8949.

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.

Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

Hypothetical examples shown are for illustrative purposes only.

Download The Capital Gains Tax Calculator

[![Cap Gains Calculator For Investors](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg "Estimate the cap gains tax owed ...") ](https://www.realized1031.com/blog/can-capital-losses-offset-dividend-income#blogform)

Download Calculator

---

 

---

### Cap Gains Calculator For Investors

![Download The Capital Gains Tax Calculator](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg)

Estimate the cap gains tax owed after selling an asset or property

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.

Search

### [Why Realized](https://www.realized1031.com/why-realized)

- [Wealth Management](https://www.realized1031.com/the-wealth-management-gap)
- [Why Realized](https://www.realized1031.com/why-realized)
- [Our Process](https://www.realized1031.com/how-realized-works)
- [Scenarios](https://www.realized1031.com/scenarios)
- [Private Client Program](https://www.realized1031.com/private-client)
- [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services)

### [The Company](https://www.realized1031.com/about-us)

- [The Team](https://www.realized1031.com/about-us)
- [FAQ](https://www.realized1031.com/frequently-asked-questions)
- [Testimonials](https://www.realized1031.com/testimonials)
- [Press](https://www.realized1031.com/press)
- [Careers](https://www.realized1031.com/careers)

### [Partners](https://www.realized1031.com/partners)

- [Financial Advisors](https://www.realized1031.com/advisor)
- [Broker Dealers](https://www.realized1031.com/partners/broker-dealers)
- [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents)
- [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants)

### [Resources](https://www.realized1031.com/resources)

- #### Learn
  
    - [Articles](https://www.realized1031.com/blog)
    - [Glossary of Terms](https://www.realized1031.com/glossary)
    - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate)
- #### Watch
  
    - [Video Library](https://www.realized1031.com/videos)
    - [Webinar Archive](https://www.realized1031.com/webinars)
- #### Read
  
    - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust)
    - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic)
    - [1031 Exchange](https://www.realized1031.com/1031-exchange)
    - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary)
    - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones)

#### Realized

- 500 W 13th Street  
  Austin, TX 78701
- (877) 797-1031

##### [Contact Us](https://www.realized1031.com/contact-us)

- [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/)
- [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/)
- [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1)

- [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick)
- [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org)

SECURITIES DISCLOSURE

Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333).

Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment.

Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested.

This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com.

- [Terms & Conditions](https://www.realized1031.com/terms-and-conditions)
- [Privacy Policy](https://www.realized1031.com/privacy-policy)
- [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf)
- [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf)
- [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf)
-  

© 2026 Realized Holdings, Inc.

```json
{
  "@context" : "http://schema.org/",
  "@type" : "BlogPosting",
  "articleBody" : "Capital losses result from the sale of a capital asset for less than the basis. For example, if you buy stock for $1,000 and after holding it for two years you sell the stock for $500, you have incurred a $500 capital loss. In contrast, if you buy the stock for $1,000 and after holding it for two years you sell it for $3,000, you have earned a capital gain of $2,000. Capital gains are taxable. The rate imposed depends on whether the gain is considered long or short-term. The threshold for long-term capital gains is one year. If you earn a short-term capital gain by selling an asset you have owned for less than one year, the amount gained will be taxed at the same rate as your ordinary income (wages, for example.) However, if you earn a long-term capital gain by selling an asset you have owned for more than one year, the amount gained is taxed at a lower rate, which currently won’t exceed 20 percent. How do I offset gains with losses? First, consider the total capital gains and losses incurred in the relevant tax year. Remember that capital gains and losses come from selling capital assets, including stocks, bonds, and property (both personal and investment property qualify.) If you sell several assets and incur $10,000 in capital losses and $20,000 in capital gains, the amount of the gain that is subject to taxation is reduced by the amount of the capital loss. But suppose that you have $30,000 in capital losses and $20,000 in capital gains. First, you won’t pay capital gains taxes on the $20,000 you gained. Also, you still have $10,000 in losses to use in a manner that positively affects your tax obligations. If you have no other gains in that year to offset, you can offset $3,000 of other income. The $3,000 may include dividend income as well as wages or other taxable income. If you had dividend income of more than $3,000, you would owe taxes on the amount over $3,000. What is a wash sale? A wash sale refers to an investor selling stocks at a loss and purchasing the same (or even a substantially similar) stock within 30 days before or after the sale. The IRS considers this tactic a means of engineering losses and does not allow the investor to use the loss to offset gains. How is dividend income taxed? Some dividend income is taxable at the ordinary income rate, while most of such income is taxable at the capital gains rate. The difference is whether the dividend is qualified or not. Most dividends from US-based companies (and some foreign corporations) are qualified and taxed at capital gains rate as long as the investor has owned the shares during the 60-day qualifying period (before the dividend is announced) and has not hedged their position during that time. What about the balance of capital losses I could not offset? If you have higher capital losses than gains, and you use $3,000 to offset ordinary income and still have losses remaining, you can carry them forward. You can then use these carryover losses to offset capital gains in another tax year. Remember that all capital gains and losses realized in a tax year must be reported on your tax return using IRS Form 8949.",
  "articleSection" : [ "Capital Gains" ],
  "author" : {
    "@type" : "Person",
    "email" : "marketing@realized1031.com",
    "image" : "",
    "name" : "The Realized Team",
    "url" : "https://www.realized1031.com/blog/author/the-realized-team"
  },
  "dateModified" : "2023-11-30T01:00:00+0000",
  "datePublished" : "2023-11-30T01:00:00+0000",
  "description" : "Capital losses result from the sale of a capital asset for less than the basis.",
  "headline" : "Can Capital Losses Offset Dividend Income?",
  "image" : {
    "@type" : "ImageObject",
    "height" : 501,
    "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Imported%20sitepage%20images/money-house-seesaw-IS-1048402108.jpg",
    "width" : 750
  },
  "mainEntityOfPage" : "https://www.realized1031.com/blog/can-capital-losses-offset-dividend-income",
  "name" : "Can Capital Losses Offset Dividend Income?",
  "publisher" : {
    "@type" : "Organization",
    "address" : {
      "@type" : "PostalAddress",
      "addressCountry" : "USA",
      "addressLocality" : "Austin",
      "addressRegion" : "TX",
      "postalCode" : "78701",
      "streetAddress" : "500 W 13th Street "
    },
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60,
      "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png",
      "width" : 296
    },
    "name" : "Realized"
  },
  "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Imported%20sitepage%20images/money-house-seesaw-IS-1048402108.jpg"
}
```