When to realize capital loss

[Merrick Hidalgo]

I invested in a private REIT a few years ago and it went poorly. They are returning 10% of the principal. It shows up in my online account, but they have not allowed access to the funds. If I get the money in 2025, could I then use the other 90% as a capital loss on that year's taxes? Is it possible to start to realize the loss on 2024 taxes?

Thanks

[Ben Trageser]

Based on the information provided, you can only claim a capital loss when you actually sell or dispose of your REIT investment, not when the REIT simply returns a portion of your principal.

Since you haven't received the funds yet, you cannot claim any loss for 2024.If you receive the 10% return of principal in 2025 and the investment is officially terminated or sold at that time, you could potentially claim a capital loss for the remaining 90% on your 2025 taxes.

The capital loss would be calculated as the difference between your original investment amount and the amount you received back (in this case, 10% of your principal).