Turbotax did not include 2018 capital loss carryover for my 2019 return.It said there was no carryover, but there was.There's no option to manually enter info.How to fix?

[Kylie11]

Turbotax had scanned my 2018 return and picked up the full capital loss amount for 2018; also that $3000 of the total was entered for 2018. The remaining carryover was to be applied to 2019 and 2020.  $3000 is the limit you can apply each year, until exhausted. However the TT software is not recognizing the carryover; it says there is no carryover.  How can I get the system to correct this? There are no fields to manually enter this info for 2019 Federal.  Although for the State return there is a field to manually enter info.

[VolvoGirl]

Enter a Capital Loss Carryover under

Federal Taxes or Personal (Home & Business)

Wages and Income

Then scroll down to Investment Income

Capital Loss Carryovers - Click the Start or Update button

On the income page The 2019 column shows the carryover to 2020 (not your current loss for 2019).  The 2018 column shows the carryover to 2019 not the loss for 2018.

And Schedule D doesn't actually show the carryover amount to next year. To find your Capital Loss Carryover amount you need to look at your return schedule D page 2.  Line 16 will be your total loss and line 21 should be a max loss of 3,000.  The difference between line 16 and 21 is the carryover loss for next year.

And if you have a negative AGI or negative taxable income it will show up on 1040  BUT it won't reduce the carryover to the next year.

There is also a Carryover Worksheet. There is a Capital Loss Carryover Worksheet showing the carryover from the prior year and the current amounts.  Then there is also the Capital Loss Carry Forward worksheet showing the amount transferring over to next year.

In the Online version you have to save your return with all the worksheet as a pdf file to your computer to see the Capital Loss Carry Over and Carry Forward worksheets.

In the Desktop program you can go to Forms and find it in the list in the left column.

[Kylie11]

Thank you -- this is helpful, but I still have another problem happening now.  I revisited the capital loss info imported from my 2018 return and realized that I had to add the minus (-) symbol to the 2018 capital loss. I did so and now it does show the remaining entire correct capital loss amount to be carried over to future years.  However, it is showing w-a-a-a-y more than $3000 to be applied to 2019 and a very small amount being left to be applied to 2021. I know that $3000 is the limit, so why is it applying way over the limit to 2019 the 2019 return?  I was hoping to use a significant amount of the remainder of the capital loss for 2021. TT is not allowing me to edit the incorrect amount that it is trying to apply to 2019.

Of note:

- A CPA did my 2018 return, and I imported the PDF of the 2018 return into Turbotax and it extracted the 2018 capital loss info.  I am familiar with the 2018 Schedule D and it is correct, as you say.  I do already know the exact amounts that should be carried over to each year. 

- Also, I am using TT online, not desktop

- If I would have no Federal tax liability for 2019, even prior to applying the 2018 capital loss carryover, could that have anything to do with the $3000+++  capital loss carryover that TT is applying for 2019?  I think something is wrong here.

Thank you again for your assistance.

[Kylie11]

Correction to my reply:  I referred to year 2021 -this is a typo - it should be 2020.

[VolvoGirl]

Not exactly following the years.....but do you have any current 2019 gains?  You get to first offset the loss against any gains you have each year so that can use more of it up.  Then after applying the loss to the current gains you can take a max loss of 3,000 (1,500 MFS)per year.  Turbo Tax does all the calculations for you.  Just enter the prior year carryover amount.

I'm not sure you have to enter the minus sign.  I'll have to check that out.  Also I would be surprised if transferring from 2018 pdf would pick that amount up.  PDF only transfers basic items like name & address.

To not reduce the carryover loss is based on your taxable income not your tax liability.  Look at 2018 line 10.

[Kylie11]

Yes!  I think you are right, I do have some capital gains for 2019.  The exact amount that TT now shows for capital loss carryover does include the $3000 plus the total of Capital Gains Distributions on my 2019 1099-DIV and the total of Realized Gain/Loss on my 1099-Misc. /1099-B. So that must be what happened.  But I was hoping to only have to use the $3000 because my tax liability is already so low, and then save the remainder above $3000 for next year.  I guess that's not possible?

However, entering this carryover also reduced the Total Income amount that TT calculates by 24%.  It reduced my  Taxable Income by 40%, Taxable Social Security Benefits by 44%. (I do not have wages, but I do have  a high percentage of Qualified Dividends as part of my total income and I know that this somehow reduces tax liability).  I know tax law is complex and I don't understand these calculations, this here sounds radical, but does this seem to make sense to you? Not complaining about reduced tax liability, but just need to make sure this is correct.

TT actually did a pretty good job of importing the financial info from the PDF of the 2018 return. Not perfect, but pretty good and the capital loss carryover was really the only important info I needed.  but when looking at the TT capital loss carryover, in the "edit" section it displayed the numbers as positive, no minus sign (TT notes that the numbers have to show as negative)  and therefore TT was ultimately showing no loss carryover at all.  Once I entered the minus sign it ultimately showed the  loss carryover for the amounts we have discussed here.

It now appears that for the State Return I have to do a whole manual worksheet outside of TT for the State carryover capital loss, but that's a whole other matter.  I was hoping TT could do this for me, which is why I pay for this software, to avoid my having to do things manually.  Guess not.

You have been tremendously helpful to me, you seem to be an expert, so thank you! I think at this point if you could just let me know if what I stated above sounds right and makes sense, before I proceed with submission -- or if I should get a CPA/adviser.  Turbotax is supposed to have some phone support included with just the cost for the program (without paying for CPA upgrade), but they failed to provide that, which was disappointing.

[VolvoGirl]

Hope I have been explaining it well and clear.

Sorry, You have to report the carryover every year until it's used up.  You can't skip a year.  Even if you don't report it on your return you have to reduce it by the 3,000 (1,500 MFS) when you carry it over to next year.  You can't choose when to use it.

This is from the IRS Pub 550 page 66 middle column....

"When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. "

Here is pub 550…  http://www.irs.gov/pub/irs-pdf/p550.pdf

[Kylie11]

Thanks VolvoGirl, you did a great job explaining and totally sent me in the right direction for getting this clarified.  I have it all settled now.