Yes, if your long-term gains in 2025 are greater than $65,000, you will be able to absorb the entire short-term loss carryover of $65,000. This will significantly reduce your tax liability for 2025.
Here is how it works for Capital Gains and Losses:
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Offsetting like-kind gains first: Your short-term losses are first used to offset any short-term capital gains you might have in the current year.
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Offsetting other gains: If your short-term losses exceed your short-term gains (which they will in your case, as you have $65,000 in losses and are only anticipating long-term gains), the remaining short-term losses can then be used to offset your long-term capital gains.
If, your capital gains in 2025 are less than the $65,000; in that case, after offsetting all gains, you will still had capital losses remaining. You could deduct up to $3,000 of those losses against your ordinary income each year, and any further unused losses could be carried over indefinitely to future tax years. However, in your scenario, with gains exceeding your losses, you should be able to fully utilize the carryover.
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