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Level 5

Solved

Capital Loss Carryover Application

Forum|Forum|2 months ago
April 23, 2026
1 reply
160 views

I have a capital loss carryover that I would like to apply to a capital gain. Does TT automatically apply my carryover to income before a capital gain? I don't mind TT doing it this way, I just want to make sure that when I sell the equity the carryover can cover the gain.

Best answer by mesquitebean

Expert Reviewed

@freddytax asked: "Does TT automatically apply my carryover to income before a capital gain?"

If you are asking if the capital loss carryover is applied to ordinary income first, that's not the way it works. TurboTax applies the carryover loss amount first to other capital gains before any excess net loss goes to offset ordinary income, which is limited up to $3,000 against ordinary income ($1500 if married filing separately.) See this FAQ and video:

FAQ: What is a capital loss carryover?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-and-deductions/capital-loss-carryover

Level 15

If you have used TurboTax for the returns, then the carryover loss will be automatically brought to the following year and applied.

Otherwise, use the information in the following TurboTax help article to enter the capital loss carryover:

How do I enter my capital loss carryover?

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mesquitebeanAnswer

Level 15

Expert Reviewed

@freddytax asked: "Does TT automatically apply my carryover to income before a capital gain?"

If you are asking if the capital loss carryover is applied to ordinary income first, that's not the way it works. TurboTax applies the carryover loss amount first to other capital gains before any excess net loss goes to offset ordinary income, which is limited up to $3,000 against ordinary income ($1500 if married filing separately.) See this FAQ and video:

FAQ: What is a capital loss carryover?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-and-deductions/capital-loss-carryover

freddytaxAuthor

Level 5

Thank you, exactly what I was looking for!!