Capital Loss Carryover from 2020

Forum|Forum|4 years ago
February 6, 2022
2 replies
1 view

In 2020, I had a total capital loss of $7477 (all short term) and used $3000 on the 2020 returns (the -$3000 correctly shows on line 7 on the 2020 Turbo Tax returns).

On my 2021 returns, I have a short-term loss of -$13 and a long-term gain of $17,484. I had assumed that I would be able to offset this gain with a $3000 loss carryover from 2020 plus the $13 short-term loss. However, TT is showing on line 7 a gain in the amount of $12,994 which means that the entire carryover of $4477 was used in addition to the $13 loss.

I do not understand why I am not limited to a $3000 capital loss carryover? Why is TT allowing the entire carryover amount to be used?

Anonymous_

Level 15

@Chezboesch wrote:
I do not understand why I am not limited to a $3000 capital loss carryover? Why is TT allowing the entire carryover amount to be used?

You are allowed to use your capital loss to offset your capital gains.

The $3,000 loss limitation applies to (offsetting) all other income, not just capital gain.

The entire carryover amount of $4,477 can be used to offset your $17,484 gain.

VolvoGirl

Level 15

Yes that's right.

You get to first offset the loss against any gains you have each year so that can use more of it up. Then after applying the loss to the current gains you can take a max loss of 3,000 (1,500 MFS)per year. Turbo Tax does all the calculations for you. Just enter the prior year carryover amount.

If you transferred your prior return it should be already filled in.