Suppose I have $10,000 in short-term capital losses and $20,000 in long-term capital gains in tax year 2020. What are my options?
I understand that I can use the short-term losses to offset the long-term capital gains, but this wouldn't be very effective since long-term capital gains are only taxed at 15% (as opposed to being taxed at the regular income rate). Are there other options that would allow me to apply the short-term losses to reduce ordinary income? For example, can I carry the short-term losses forward for use in future years? This would allow me to offset short-term capital gains or ordinary income in future years, which are taxed at the regular income rate.
