I think you are still misunderstanding me, and how things work. Let's do an example, and look at the Lines on Schedule D for how it works. For simplicity, let's say that everything is long-term gains and losses.
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/f1040sd.pdf">https://www.irs.gov/pub/irs-pdf/f1040sd.pdf</a>
1) In 2016 you sold stocks that resulted in $20,000 in gains, and $10,000 in losses (which results in $10,000 in gains reported on Lines 8-10 of Schedule D).
2) Your carryover losses from 2015 are $30,000 (that goes on Line 14 of Schedule D).
3) The result is Line 15 of Schedule D will show negative $20,000. RIGHT?
In other words, the $30,000 carryover loss completely cancels out the 2016 net $10,000 gains.
When you bring to that negative $20,000 loss to page 2 of Schedule D, Line 21 will allow negative $3000 to go on Form 1040.
The proper result is that Line 13 of your Form 1040 will show negative $3000.
