I don't want to use my capital loss carryover this year, how do I do this?

[loucksdonna]

Must I use the allowable 3000 capital loss carryover for 2015?  I want to not use any and carry it over to next year since it would not be advantageous for me to use it this year?

[ChelsiE2 · Accepted solution]

Unfortunately, the IRS will not allow you to skip a year.  Even if it would be more advantageous to hold on to it and use it next year, you are still required to reduce the amount by $3,000 each year.

[kadisciples]

My situation is similiar. I overlooked my capital loss carryover from 2014 and didn't claim it last year. Are there steps I can take to claim it this year or have I lost my chance?

[ChelsiE2]

@kadisciples If you've already filed your 2015 return, and did not include your capital loss carryover from 2014, you can amend your 2015 return to include this loss.  For information on how to amend your return, please see: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed"...>

[Curious One]

Thanks.  I've found this posting elsewhere on the TT forum:  <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2566411-do-i-have-to-use-a-capital-loss-carryforward-even-if-i-hav... seems to say that TT will look at the entirety of my return to determine if I've overallocated current application of CLCOs, and if it concludes that I have, an adjustment will be made to my CLCO schedule and worksheet to re-credit back the excess allocation for the year in question.  Am I reading this post correctly?  And if so, is it true?  What can I do to trace the steps to see how the calculation is made and where the numbers are posted within my return?

[Capital Gains Man]

No one seems to really know this answer. This policy of being forced to take the $3,000 capital loss deduction no longer seems to apply.

See link:

https://fairmark.com/investment-taxation/capital-gain/capital-losses/capital-loss-with-little-or-no-...

I don't know who is right and who is wrong.

[cptndave]

Yeah, pretty clear that TurboTax isn't following this rule.  I have < 77,200 married/filing jointly income and hence 0% long-term capital gains tax, but TurboTax is still reducing my carry-over by the full amount of my long-term gains.  It's easy enough to adjust for this in my imported 2018 to 2019 carry-over to fix thing up though.

[fanfare]

Your carry over expires at a rate of $3,000 per year whether you file it or not.

If you didn't file it, you missed out on a 3,000 reduction in your taxable income.

The only way to carry over the full amount is to have no tax due (zero tax).

[Slimbo]

With reference to Fairmark piece: Tried it using form 1040 carryover worksheet, and got the same result.  Then tried it using form 1041 (estates and trusts) carryover worksheet with real data.  Got different result: some of carryforward from prior year was used (but less than $3000).

[GeorgeM777]

Can you provide additional information regarding your post.  If you have carryover losses from a prior year, those need to be used each year until they exist no more.  Taxpayers cannot choose which years to use carryover losses of the type you describe.  

Also, are you preparing a tax return for a Trust or Estate (Form 1041) and an individual tax return, Form 1040?  A trust is a separate legal entity and a tax return is prepared for a trust; however a Trust may also distribute funds to beneficiaries, and those beneficiaries will likely need to complete their own tax returns.   

@Slimbo

[Slimbo]

Assuming that "you" above refers to Slimbo's post, here's what I did:

1)  Used the carryover calculation worksheet for form 1040 to reproduce the example in the Fairmark piece (i.e., using the data in the example). Result: the same as what the author of the piece came up with.

2)  Used actual data for a form 1041 (fiduciary of trust or estate) with the form 1041 carryover calculation sheet.  There is no distribution to beneficiaries.  Even though -- as in the Fairmark example -- the capital loss carryover from the previous year was not "needed" (i.e., with the exemption, income was negative), the carryover calculation "used" some of the carryover -- NOT the result with Fairmark example.

In both 1) and 2), the tax calculation incorporated the capital loss.

So . . . I infer that, in the case of an "un-needed" capital loss carryover from the prior year, things work differently in the case of an individual vs. a trust with respect to what is or is not carried forward to the next year.

[Robert461]

Are there any exceptions to this rule?  I was unable to do taxes the following year and hired someone else, now I stand to loose a $6000 carryover in this year's report. Advise?

[Critter-3]

@Robert461 

Did you review the return you had someone else do ?   Did they take the loss carryforward into consideration ?   If not you need to amend that tax return to take the allowed carryforward then any amount unused can be carried forward to the next tax year and so forth and so on. 

[Hal_Al]

@Robert461 

You cannot "lose" your carry over.  It's either applied to the current year return or carries over to the next year or, frequently, some of each. 

If last year's tax preparer failed to apply it properly, you can file an amended return, to claim it.  But even if you don't amend, you must adjust the carry forward amount, for the current year, by the amount that shoulda been claimed last year.   

Q. Are there any exceptions to this rule?

A.  Sort of. 

Basically, you are allowed to use your standard or itemized deductions to reduce your taxable income before having to use your capital loss. So, if your taxable income is already zero, you do not have to use your capital loss carry forward, on your current year return.

Technically, if your standard (or itemized) deduction is greater than your AGI, without  the capital loss, then all your capital loss is carried forward. 

TurboTax can handle it and will prepare a "Capital loss carry forward worksheet" to show the how much of your capital loss that will be carried forward to the next year.  Your tax preparer  may have done something similar. 

[theoluo]

Hi, I found that my 2021 and 2022 tax forms didn't show the correct carryover capital loss. Wondering how to fix this so that it is taken into account for my 2023 tax filing? Thank you!