"I started investing with the new NISA, but I have unrealized losses...Is there anything I can do with my tax return?"Are you feeling confused?

In conclusion, There is no point in reporting losses in your NISA account. Neither ``profit and loss aggregation'', which offsets the profits of specific accounts or general accounts, nor ``carry-over deductions'', which allows losses to be carried over to the next year or later, cannot be used with NISA accounts.

In this article, based on the latest information as of February 2026, we will explain in an easy-to-understand manner why NISA cannot be used to calculate profits and losses, how to judge when an unrealized loss occurs, and how to use it wisely with specific accounts.

What exactly is “profit and loss total”?

First, let's review the meaning of "profit and loss total". In the investment world, there is a system in which transactions that yield a profit and transactions that yield a loss are added together, and taxes are levied only on the total profit. This is theprofit and loss statement.

For example, suppose you have a profit of +300,000 yen on A stock and a loss of -100,000 yen on B stock. Tax (approximately 20.315%) will be charged only on the total profit and loss of "300,000 - 100,000 = 200,000 yen". In other words, even if you incur a loss, you can reduce your tax liability.

Furthermore, if you incur a total loss during the year, you can carry forward the loss for up to 3 years and offset it against your profits from the following year. This is a “carry-forward deduction.”

However, these mechanisms can only be used for transactions in specific accounts and general accounts. This is the pitfall of NISA.

Reasons why you can't calculate profits and losses with NISA | Behind the scenes of "tax exemption"

The biggest advantage of NISA is that there is no tax on profits. Normally, about 20% of profits are taken away as tax, but with NISA, it is zero. This is amazing.

However, this "tax exemption" becomes a disadvantage in the event of a loss. As is clearly stated in National Tax Agency materials, losses incurred in NISA accounts are treated as "nothing".

Roughly speaking, the logic is like this.

  • NISA profits → tax-free (zero tax)
  • NISA loss → treated as “no loss”
  • That's why → profit and loss aggregation and carryover deductions are not possible

In other words, ``In exchange for not taxing your profits, we won't take care of your losses'' is how NISA works. It's designed to keep the tax system simple.

This is explained in detail in Commentary by Koyano Tax Accountant Corporation, but it is intentionally done this way so that beginners in investing can easily get started without having to file a tax return.

Look at specific examples | How profits and losses differ between NISA and specific accounts

It's easier to understand when you look at numbers, so let's compare how the results change depending on the type of account even for the same loss.

Case 1: If a loss of 100,000 yen occurs in a specific account

  • Specific account A: +500,000 yen profit
  • Specific account B: -100,000 yen loss
  • Taxable after profit and loss: 400,000 yen
  • Tax (approx. 20.315%): Approx. 81,000 yen

If you add up the loss on your final tax return, you will save approximately 20,000 yen in taxes.

Case 2: If you have a loss of 100,000 yen in your NISA account

  • NISA account: -100,000 yen loss
  • Specific account: +500,000 yen profit
  • Profit and loss total: Not possible (NISA losses are treated as “nothing”)
  • Taxable: The entire 500,000 yen
  • Tax: Approximately 102,000 yen

Since NISA losses cannot be set off against the profits of a specific account, your tax will not be reduced by a single yen. If NISA had made a profit, it would have been tax-free and it would have been a profit, but if there is a loss, there is no remedy, which is difficult.

Should I sell when I have an unrealized loss? Should I keep it?

When you have an unrealized loss with NISA, you wonder, ``Should I cut the loss and switch to another stock?'' ``Should I continue holding it?'' Organize the points of judgment.

Case where you should keep it

  • Investing in index funds (S&P 500, global stocks, etc.) → There is a high possibility of recovery in the long term. The tax-free holding period of the new NISA is unlimited, so there is no need to rush to sell it
  • There is no fundamental problem with the investment destination → If the market is temporarily down, the basic strategy is to hold on to it
  • You don't need the money right away → If you can wait 5 or 10 years, use time on your side

Case where you should consider selling

  • There are doubts about the future prospects of the investment target → If the performance of individual stocks continues to deteriorate, cutting losses is an option
  • Needed for living expenses → Consider selling if you have specific plans for spending, such as purchasing a home or paying for education
  • I want to switch to a better investment destination → If you sell with NISA, the tax exemption limit will be reinstated the following year, so it is also possible to switch to another fund

The key point is to make judgments based on ``Is there a reason to continue investing in this investment?'' rather than ``Selling because of a loss.'' Tokai Tokyo Securities' NISA Center also explains the importance of avoiding emotional buying and selling and making decisions from a long-term perspective.

Wise use of NISA and specific accounts | How to build a portfolio that is hard to lose

In order to minimize the disadvantage of NISA, which does not allow you to calculate profits and losses, the key is to use your account properly. We will introduce our basic thinking as of February 2026.

Investments suitable for NISA accounts

  • Index funds for long-term holdings (world stocks, S&P 500, etc.)
  • High dividend stocks (great benefit of dividends being tax exempt)
  • Growth stocks that are expected to increase in value (maximizes tax-free benefits when profits are made)

In other words, the golden rule is to put ``investments that are likely to make a profit'' in your NISA.

Investments suitable for specific accounts

  • Short-term trading and swing trading (Even if you incur a loss, you can make up the profit and loss)
  • High risk/high return individual stocks (specified accounts are safer for items with high risk of loss)
  • More than NISA annual investment limit (3.6 million yen)

In short, the basic idea is to allocate investments such as ``Investments that are likely to result in loss in a special account'' and ``Investments that are likely to produce a profit in NISA''. Maneiro explanatory article also recommends this usage.

In some cases, a tax return may be required | Exceptions that NISA users should be aware of

The general rule is that NISA does not require a tax return, but according to Matsui Securities' explanation, a tax return is required (or advantageous) in the following cases.

  • The method of receiving dividends is other than the "proportional distribution method by the number of shares" → Dividends may be taxed, so you should check whether tax exemption applies in your final tax return
  • You are also trading in accounts other than NISA (specific accounts/general accounts) → If you want to aggregate profits and losses between multiple specified accounts, you need to file a final tax return
  • If you make a profit in a specified account (withholding tax), file a tax return for medical expense deductions, etc. → Be careful as filing a tax return may affect the determination of spousal deductions and dependent deductions

A particularly common pattern is that people use both a NISA account and a specified account and forget to add up the profits and losses between the specified accounts. Even if NISA losses cannot be combined, they can be combined on a final tax return between specified accounts. Don't forget to check, as there is a possibility that you may get your overpaid taxes back.

FAQ

There is an unrealized loss of 1 million yen on the new NISA. Should I file a tax return?

There is no tax benefit even if you declare unrealized losses in your NISA account. This is because neither profit and loss aggregation nor carryover deductions are possible. However, if there are transactions in a specific account, it is worth filing a final tax return to calculate the profits and losses.

If I cut my losses with NISA, what happens to the tax-free allowance?

When you sell with NISA, the tax-free allowance for the purchase amount will be reinstated the following year. For example, if you sell 1 million yen in 2026, 1 million yen will be returned to your annual investment limit in 2027. However, the restoration will be based on the book value (the amount at the time of purchase).

What happens when the tax exemption period for the old NISA ends?

The old savings NISA has a tax-free period of up to 20 years, and the old general NISA has a tax-free period of up to 5 years. After the period ends, the funds will be automatically transferred to a taxable account (specified account, etc.). At this time, the market value at the time of transfer becomes the new acquisition price, so if the asset is transferred with an unrealized loss, there is a possibility that extra tax will be levied when future profits are made.

The dividends from my NISA account were taxed. Why?

The method of receiving dividends may not be set to the "proportional distribution method of shares." If you receive the dividend at a post office or transfer it to Japan Post Bank (dividend receipt method), the dividend will be taxed even in a NISA account. Check and change the receiving method on the securities company's settings screen.

References