The largest negative amount that can ever appear on Form 1040, Line 7 is -$3000.
Don't rely on "what you've heard". If you're following the directions for Schedule D, you'll see the limitation clearly described for Schedule D, Line 21.
Remember, you still have the remaining $1000 loss. In the future, if you have a capital gain, you can reduce it by this amount. So keep a record of your "carried-over" losses for next year.
Good luck on your "manual" filing. It can be a lot of work, but it will bring you a good understanding of how taxes work. I would recommend at least using some kind of software to check your work.
