Need help finding solution to utilize a large capital tax loss.

[Alan Duro]

Hi BP members! I had a tax question that I can't seem to find any info about online. The CPA's I've spoken with haven't been very creative in helping come up with solutions. A close friend of mine took a large capital loss back in the 08' crash (roughly $750K). He's been carrying this loss with him each year and only deducting the approx $3000 per year that the IRS allows.  He's been informed that the only way to utilize this loss is by applying it to a large capital gain. However at the moment, he doesn't have such a capital gain to apply it to.

I was wondering if there's a (legal) way to creatively partner with somebody on a real estate deal and apply his capital loss. Maybe they split the benefit of the capital loss somehow? My friend's open to any ideas. He just desperately wants to make use of this tax loss before he dies (he's in his 70's).

Any ideas you have would be greatly appreciated. Thanks!

[Eamonn McElroy]

He had $750k of capital loss, I'm curious what plan his tax advisor and financial advisor came up with roughly 10 years ago?

If he had neither, and currently has neither, why not?  He should be able to afford a heavy hitter.  Has he not found anyone who can provide value?

It seems we need to generate some cap gain, whether that be ST cap gain, LT cap gain (including 1231 gain), 1250 gain, or collectibles gain...doesn't matter.

Sure, we can find a hedge fund that will stuff him with gain, as a previous poster mentioned, but the underlying economics of the investment need to follow the allocations if they're to be respected for income tax purposes, which should be noted, even if it isn't an issue.  And...the other partners will likely complain if it's arms length.  Who wants to forgo gain, even if it means tax?

The key is to find a rockstar CPA, who can work together with a rockstar financial advisor to create the desirable result.