Here's an example. Suppose you have a net capital gain of $2,000, other income of $50,000, and a capital loss carryover of $10,000. $2,000 of your loss carryover will be applied to the $2,000 of capital gain. Then $3,000 of the loss carryover will be applied against your $50,000 of other income. So the total amount of the capital loss carryover that's used is $5,000.
