@NotSuzy wrote:
I realize that this is an old thread, but I am running into similar difficulty with capital loss carryover not carrying over. I want to make certain that I understand the limitations of TurboTax correctly, because they seem unbelievable.
1. It appears that if even one tax year shows no capital gains or losses, all capital loss carryover from prior tax years disappears into the ether.
2. Users of TurboTax must keep track of their own capital loss carryovers, and all of the related capital transactions, because the TT product deletes prior carryover data if a single tax year sees no capital gains or losses.
3. If the TT program asks users to re-enter the details for past carryovers, we have to dig out a decade or two of tax returns and enter all the information AGAIN. Or we can try to "manipulate the program" into taking a single carryover value without substantiation, as one respondent suggested.
If my perceptions are accurate, it's insane. We are paying for a product that (allegedly) maintains *all* of our tax records in a single, secure, digital location. However easy or difficult it is for a TT user to track down and re-enter the information needed to apply a capital loss carryover is irrelevant. We are paying TT to do this record keeping for us.
I hope that Intuit realizes the absurdity of this deficit in their program and rectifies it promptly.
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@NotSuzy - I think you are right that not having any capital gain or loss transactions, TurboTax does not auto fill (populate) the Schedule D with your remaining Capital Loss Carryover amount from the previous year.
Exactly how the omission or lack of Capital Loss Carryover data in one's tax return (due to not having any capital gains or losses in the year being filed) affects a refund amount or amount owed is questionable. However, claimed capital losses will come off taxable ordinary income, reducing your tax bill. In addition, Capital Loss is used to offset earned interest, but cannot be used to offset qualified dividends which is taxed at long-term capital gains rates. The maximum net capital loss that can be used in any given tax year is $3,000 for 'married filing jointly' and half that amount for 'married filing separately'.
But, there is a sliver lining as I understand it - your remaining Capital Loss Carryover amount is not lost forever (because you didn't see it on Schedule D) and it will be applied in Schedule D if the taxpayer has any capital gain or loss transactions - because a capital gain or loss transaction is what actually triggers TurboTax to bring it into action on Schedule D. Selling one stock for a $10 gain brings your remaining Capital Loss Carryover amount to light on your tax return!
@NotSuzy - I totally agree that TurboTax should always (every year) bring the remaining Capital Loss Carryover amount to the Schedule D even when there is no capital gain or loss transactions to affect the amount. I do not know why this is not done by TurboTax! There is big problem when it is not done...and it is costing taxpayers! I think it is a bug in the software, but for some reason the TurboTax programming gurus are not fixing it. ..
The TurboTax software process of not bringing the remaining Capital Loss carryover amount into the tax return (when there is no capital gain or loss) throws taxpayer's money away! Here's why - when you file your tax return with the Capital Loss carryover amount BLANK it actually prevents the taxpayer from using as much as the $3,000 maximum amount to reduce their taxable ordinary income. This is a very serious matter for taxpayers to lose that much money, which depending on their tax rate can be a few hundred dollars up to many times that much! And, for the taxpayer to correct this omission error caused by TurboTax's software the taxpayer must submit an amended tax return. That's never good!
Note: A TurboTax moderator or overseer of this TurboTax Community should pass this information on to whoever can correct this problem in the software. It's a serious flaw! It's throwing taxpayer's money away!
