If you have carryover losses from a prior year, they need to be carried forward and used each year until they are exhausted. There is no option for taxpayers to choose which years to use carryover losses.
From IRS Topic 409:
If your capital losses exceed your capital gains, the amount of the excess loss that you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately) or your total net loss shown on line 16 of Schedule D (Form 1040), Capital Gains and Losses. Claim the loss on line 7 of your Form 1040 or Form 1040-SR. If your net capital loss is more than this limit, you can carry the loss forward to later years. You may use the Capital Loss Carryover Worksheet found in Publication 550 or in the Instructions for Schedule D (Form 1040)PDF to figure the amount you can carry forward.
From the IRS 2023 Instructions for Schedule D:
You have a capital loss carryover from 2023 to 2024 if you have a loss on line 16 and either:
- That loss is more than the loss on line 2; or
- The amount on Form 1040 or 1040-SR, line 15, (or Form 1040-NR, line 15, if applicable) would be less than zero if you could enter a negative amount on that line.
To figure any capital loss carryover to 2024, you will use the Capital Loss Carryover Worksheet in the 2024 Instructions for Schedule D.
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