Tax loss carryforward after going broke in trade?

OptionFool said:
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ps. I would be curious to hear any stories of people who killed themselves after a big trade wipeout. I am surprised more people don't kill themselves who file for bankruptcy.
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You need to consult with a bankruptcy lawyer before you pull the trigger on that idea, because it will haunt you for 10 years from date of judgement. It might be better for your credit to have a 1.5 mil debt on file, than a bankruptcy of 1 million. If you manage to repay that debt in, say, 5 years, then your file can be wiped clean. No more debt.

But a personal bankruptcy will follow you for 10 years, no matter how many millions you earn later and pay off said debt. You have decisions to make. Explore your options before deciding on a court date.
 
If the 500k owed the broker is forgiven I think it can be considered a cap gain you would have to pay taxes on. But then I'm not a tax guy. :p I know it can work that way if a bank a short sells a house for less than the mortgage.
 
Option_Attack said:
If the 500k owed the broker is forgiven I think it can be considered a cap gain you would have to pay taxes on. But then I'm not a tax guy. :p
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Well that is a downright silly idea, now isn't it? Puzzle that out in your head...

You owe 500K. So you are -500K.

Your -500K is discharged, so you are net zero.

So how does that translate to a 500K gain you have to pay tax on?
 
Overnight said:
Well that is a downright silly idea, now isn't it? Puzzle that out in your head...

You owe 500K. So you are -500K.

Your -500K is discharged, so you are net zero.

So how does that translate to a 500K gain you have to pay tax on?
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Beats the hell outta me. My head hurts now! :D Cerveza amigo!
 
OptionFool said:
I am the OP. Not a trader, just an investor. Lost a 7 figure amount in a day.
ps. I would be curious to hear any stories of people who killed themselves after a big trade wipeout. I am surprised more people don't kill themselves who file for bankruptcy.
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Do you have a wife, kids and house to lose?
My guess the odds of suicide go up massively if you have those three to lose. A single guy renting a flat doesnt have much to lose.


Even if you can withstand not topping yourself, there are also the long term effects to consider e.g higher risk of developing long term depression or medicating the pain away with drink and drugs. A slower form of suicide

Some people are more resilient though and it doesn't effect them that badly
 
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