Using Capital Loss

[contrabike]

Why is my Capital Loss ($xx) from 2023 still showing this year? I assumed it would be automatically applied against our wages/salaries/tips last year, but it wasn't. Do I need to apply it manually, and where? Thanks!

[rjs]

The 2023 capital loss should appear on line 7 of your 2023 Form 1040. If it's not there, you have to file an amended return for 2023 to apply the loss.

The maximum amount of capital loss that can be applied against ordinary income such as wages is $3,000. If the loss was more than that, line 7 of your 2023 Form should be -$3,000. The remainder of the 2023 capital loss is carried over to 2024, and to subsequent years if necessary, until it is used up. But the remaining loss will not carry over correctly to 2024 if it's not shown correctly on your 2023 tax return. You need a correct 2023 tax return in order to calculate the capital loss carryover to 2024.

[rjs]

On your 2023 Form 1040, if line 14 is more than line 11, then line 15 will be zero. In that situation, none of your capital loss is actually "used up," even though it appears on Form 1040 line 7, so the full amount carries over to 2024.

[contrabike]

Thanks for your response.

This capital loss is under $100, and it does appear on line 7 in 2023 tax return. I assumed it has been used up, and would not reappear again. But while doing our taxes with Turbo Tax this year I see "All capital losses used in 2024 - $0.00", and then "Remaining losses carried forward to 2025 - $xx" there it is again. Looks like it has not been used for 2023 taxes. What does it mean and how do I use it for 2024 taxes, not to see it ever again?

[contrabike]

Yes, the situation you described with lines 14, 11, and 15 is true for our return. So what needs to be done at this point to use up the capital loss figure?

[rjs]

If you have the same situation on your 2024 tax return - Form 1040 line 15 is zero - then the capital loss doesn't do you any good. Your taxable income is already zero without using the capital loss. The loss will continue to carry over from year to year until it is actually used. You don't have to do anything.

[contrabike]

What can I do if I don't want this Tax Benefit anymore? Even with my Line 15 being 0, I would like to eliminate this minuscule Capital Loss Carryover figure from recurring on my taxes in the future. Is there a way of removing it manually, or applying it elsewhere so it disappears? Thanks!

[AnnetteB6]

Try using the steps in the following TurboTax help article to go to the place where carryover losses can be entered manually.  The carryover should be shown on this page and you can then delete the entry to prevent it from being carried forward again.  

How do I enter my capital loss carryover?

@contrabike 
 

[fanfare]

If you are using TurboTax Online you cannot get to the carryforward worksheet to zero out your potential future deduction.

As suggested above you can override to zero when you do your next tax return (which could be this one)