I have $40 K capital loss carryover from last year and it increased a little this year. As I understand I can only apply this to offset $3K of ordinary income (IRA RMD withdrawals). Is the only way I can benefit from this capital loss carryover by selling stock with high profit i.e. relatively low cost basis? I recall previously I was able to apply some of this to ordinary income.
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The program does this automatically for you ... it will take the prior year loss and net it against any current year gain or add the current year loss to it ... then takes up to $3000 of the loss against ordinary income ... review the Sch D, Sch 1 and the form 1040 to see this happen.
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