Yes, but there are limits to how the carry-over losses can be used. Losses must be applied to gains of the same type first, and then the following applies:
- If you have $2,000 of short-term loss and only $1,000 of short-term gain, the net $1,000 short-term loss can be deducted against your net long-term gain (assuming you have one).
- If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary and interest income.
- Any excess net capital loss can be carried over to subsequent years to be deducted against capital gains and against up to $3,000 of other income.
- If you use married filing separate filing status, however, the annual net capital loss deduction limit is only $1,500.
What is a capital loss carryover?
Capital Gains and Losses
@mirvetpal
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