Amending Prior years Capital loss carryforward.

[brandonchen0920]

I amended my capital loss for 2018, and therefore capital loss carryover was changed. Will the IRS automatically update the capital loss carryover for 2019? (it does not change the tax payment/refund for 2019 since I took 3000 for 2019 also, but the carryover will be different). Can I file my 2020 return with the updated capital loss carryover directly, or I have to wait for 16 weeks for the 2018 amendment was accepted, then amend the 2019 carryover and wait for another 16 weeks to file my 2020 tax return.

[AlanT222]

No, the IRS will not automatically amend your 2019 capital loss carryover.  You must amend the 2019 income tax return just as you amended the 2018 income tax return.   You can amend the 2019 income tax return now based on your 2018 amended income tax return and then file your 2020 income tax return based on your 2019 amended income tax return.   

[brandonchen0920]

Thank you. I assume I need to amend the 2019 NYS capital loss carryover as well.

[AlanT222]

Yes, if the Federal amended return changes your state return, you will have to amend the state as well.  

[jmartinicpa]

I have a similar question. Realized I had missed capital losses in previous years because my broker statements showed the wrong basis. Had to amend 2016 forward by paper since they don't accept electronic amendments pre-2019 but I have been waiting FOREVER (9+ months) for them to process.  As a result, I still have not filed 2019's return at all because I fear it will be rejected if the capital loss I'm carrying forward was never processed into the IRS's system (return is completed and ready to go but apparently filing is not actually required if you're getting a refund). Well now we're almost at the filing deadline for 2020 and they STILL have not processed my amendments. I can file an extension but I will probably owe $ this year and I'm not even confident they will have my amendments processed by October.  There is apparently nothing that can be done for them to expedite the processing. How the heck are we supposed to comply with their deadlines when they won't do their part? Any recommendations on what to do? I really don't want to just file anyway, have all my returns rejected, and then be dealing with this for the next frigging decade. Help!!

[JotikaT2]

You may benefit by working with a taxpayer advocate.  They will be able to work with you and guide you in this process since your return has prior amendments that are affecting it.

Tax advocate services

Your other option is to prepare your 2019 and 2020 using the numbers as filed on the corrected tax returns, even though they have not been processed yet.  This will ensure you are not subject to any additional late filing fees or penalties.