Of course, each of us would rather make money on our investments than have losses, but tax losses aren't all bad. Eventually, you can get some gain out of them. Basically, you can use the tax losses to offset future capital gains, and you can carry them forward indefinitely. This year's tax loss can balance next year's capital gain—or even in many years after that. In addition, you can use up to $3,000 a year of tax losses to offset ordinary income, after using those losses to offset capital gains that year.

Consider: If you sell your home for more than the one-time exemption — $250,000 for singles, $500,000 if you're married — you can use the old carry-forward tax loss against capital gain on the home. More: After death, the spouse inherits the tax loss to use against capital gains and the right to use $3,000 a year against ordinary income. Once the spouse dies, though, the tax loss disappears. Unfortunately, this doesn't apply to any losses or gains in a tax-deferred account. Anything taken out of such an account is taxed as ordinary income. But the $3,000-a-year loss carryover can be used against the income from that account.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University. He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

nickersonpa.com