GameStop’s wild ride will leave some investors with a huge tax bill

Unless you qualify as a day trader in the eyes of the IRS — a steep challenge — as an investor, you can only subtract up to $3,000 from your ordinary income for capital loses.

Herbst de Cortina said you can offset your short-term capital gains with your short-term capital loses. And the same goes for long term capital gains and loses, he added.

In other words, if a person makes a $5,000 profit on some stocks , but ends with $5,000 loss on others and those wins and loses are both held under a year, or over a year, it ends up making no difference on your tax bill.

But if you turned a $5,000 profit in some sales, but ended with a $10,000 lose elsewhere, you still have a $5,000 loss to deal with.