That is correct. It does not mean that the carryover is always reduced by $3,000 if you did not have that much taxable income to reduce, but it still must be reported each year. The carry-over amount can only come from the carry forward amount of the prior years schedule D. If no prior years return was filed with a schedule D then there is a zero amount to carry forward.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
