Yes, capital losses offset capital gains. Plus, you may deduct up to $3,000 of capital losses each year. Any excess loss is carried over to future years. You are required to take the allowed amount of capital losses each year until they are used up. TurboTax makes this calculation for you and reports the necessary loss on Schedule D.
Per IRS Tax Topic 409: "If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if you are married filing separately) or your total net loss shown on line 16 of the Form 1040, Schedule D (PDF), Capital Gains and Losses."
Read more here: What is a capital loss carryover?
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
