Capital loss carry over

[bkamran]

Hi,
I have a large capital loss carry over, and I figured I can claim my 2024 capital gains against the carry over loss. When I entered my 2024 capital gain, I noticed that TurboTax software both deducted the capital gain from my capital loss carry over, and showed I owe taxes for that capital gain! I noticed the switch happens somewhere around $34K, i.e. if I enter a 2024 capital gain of ~$34K, it gets deducted from my capital loss carry over and the owed tax does not increase, but if the entered capital gain is ~$35K, the owed taxes increases and the carry over loss is lowered. Does this make sense? Is there a limit on how much capital gain can be offset against a capital loss carry over in a year?

Thanks,

BJ

[ThomasM125]

There isn't any limit to how much capital losses you can use to offset capital gains. It is possible you have passive losses in addition to capital losses. The passive losses don't get applied to capital gain income like capital losses do. Passive losses would come from an investment in passive activities like rentals or an investment in a business that you didn't materially participate in.