3. The way they truly get you is by taxing gains, but allowing only $3000 per year in losses. This way, you could be in a situation where you pay large gains one year, but are allowed only limited recourse (3K) when you have a large loss. I find this very unfair.
Yes, but any losses that exceed $3K you can roll over YoY.
True, but it is still a limitation as there is no such limit on gains.
It is what it is.
Gents, to provide a little clarity here, the 3k max is for deductions against regular income. So if you have a salary or wages then yes you can only roll over 3k worth of losses as deductions each year and this can be done till you die or run out of losses. But..... for capital gains you can deduct all your capital losses from prior years with no limit whatsoever. The way they fuck you is you could gain a million one year, pay taxes on it then lose a million the first day of the next year and get no refund for the taxes you paid the year prior. You would either have to make another million in capital gains to use those losses as a deduction or you would have to live 333 more years making a salary and writing off 3k each year. The tax man is a real sob. A more fair form of theft would allow you to get a refund for past taxes paid.
That’s why you get a 50% discount on your CGT taxes. For taking that risk.
If you don’t like the risk, structure it as trading income so you can deduct all the losses.
You get to choose how it is treated if you are smart about it. You shouldn’t complain about outcomes which are the result of your choices.
Who is complaining about an outcome? Its a hypothetical, not an irl experience. The "tax man is an sob" is a statement of fact, not a complaint.
I think you are misunderstanding something Im saying also, bc as far as not liking the risk and structuring the income as trading income so you can deduct losses, well you can deduct all capital losses whether you declare yourself an investor or a trader. Thats what ive been talking about all along. Status declaration does not give or take away this ability, its built in for everyone. What neither a trader or investor can do is use a capital loss to get a rebate on past taxes paid. This imo is unfair to people who might find themselves in this situation. These could also be people who sold a house, land, or business at a large loss but had large cap gains they paid taxes on the year before. It applies to all capital losses as far as I know unless you have new info for me.
Dude if you have an income loss you can’t get a rebate on past income tax paid either. That’s just the way the world works. It’s not inherently unfair.
Sorry HM, as much as I like you and your charts an fractals, I have to point out you are completely wrong here. You can indeed get a refund or rebate on past income tax paid. That is how it works and it is blatantly unfair in my judgement. The IRS calls it a "loss carryback".
https://www.thebalancesmb.com/business-losses-to-offset-income-397687"Determining Net Operating Loss
Your total income and losses from all business and personal sources are collected on your personal tax return. A net operating loss can be calculated, using specific IRS methods. If you have a net operating loss, you may be able to get a refund on your personal tax return.
Net operating loss is calculated by using Adjusted Gross Income on line 37 of Form 1040 and subtracting standard or itemized deductions, but not subtracting personal exemptions. More details on net operating loss are available in IRS Publication 536.
Net operating loss is calculated on Schedule A of IRS Form 1045 (PDF). The title of this form includes the term "Tentative Refund." This refund is a requirement that you move the loss to a previous tax year in which you had a profit. It is called a "loss carryback" (described below)."
"Deducting Losses in Past or Future Years
If you have business losses that are not deductible in the year when you have the loss, you may be required to or choose to deduct these losses in past or future years. It is called a tax loss carryback or loss carry forward, and again, it's something you must get a tax professional to help you with."
I learned more than I wanted about the insanely complex tax code as an entrepreneur. 
