Refund delayed. Didn't use carryover

For 4+ years i ran a small business. I had some carryover expenses that I see on my IRS transcripts that mainly started in 22' and a little in 23'. In 2024 I did not operate my business.

This tax season for 2024 i filed my w2 wages and took advantage of a savers credit and post season IRA deductions. Did not touch the carryover that the IRS has on file.

My refund is held up.. 60 day review and today a 971 notice. No idea why yet. Is there a rule that I must apply/use my carryover before I get credits? Or something along those lines? The carryover is $36K.

Edit: I've since read it can't be skipped.

I'm certain that's the issue. I will see what the notice says but will begin to offset/deduct using the 36K. I have $5K of capital gains on stocks but the rest is w2 income - limited to $3K?

I can deduct all of the capital gains and only 3K of my w2 income, totaling $8K off of my carryover and then more next year??

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