Wondering if capital loss carryover has any impact on taking standard deduction for 2018? Does it "move the needle at all?" I've got a significant capital loss carry over

[Lisa995]

Capital loses are not directly connected to the Standard Deduction.

[VolvoGirl]

Not really,  You can only deduct a 3,000 max loss per year.  It will reduce your AGI which can affect some deductions like Medical.  But not affect the Standard Deduction.  

[ellenvp4]

Umm..I believe you can use the amount of your capital loss to balance (defray taxes on) the amount of any capital gains where you sold and reaped in profit and upside in a given tax year.
In addition to that, if you haven't "used up" all your capital loss, you can then apply $3000 dollars of that loss to ordinary income. That's what my Turbo Tax Premier did last year.

[VolvoGirl]

Yes, that's right.  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 per year.  

[Hal_Al]

No. Your capital loss carryover does not have  any impact on taking the standard deduction.

However, your standard deduction might (unliikely)  have an impact on your capital loss carry over. Basically you are allowed to use you standard or itemized deductions to reduce your taxable income before having to use any of  your capital loss. 

Another way to say it is: If your standard (or itemized) deduction is greater than AGI, without capital loss, then all your capital loss is carried forward.

[ellenvp4]

That's a shame. Turbo Tax is saying "Take the new tax plan Standard Deduction...you'll make out better."
All my many deductions have been taken away. I still have a capital loss carry over of nearly 10,000 dollars. Does it just "sit there" till you can actually make use of it?

[Lisa995]

Again, the capital loss carryover is not directly related to the standard or itemized deductions.  Yes, you get 3k of that loss per year until its used up.

[Lisa995]

or until any capital gains use it up first.

[charlieinthemone]

Wow, thanks so much! I was searching for 30 minutes for and answer until I found yours!

Basically (if I understand properly), if you have a capital loss carryover from last year but an income this year lower than the standard deduction then you don't use the carryover for that year and it just carries over untouched into the next year!

This makes sense because the standard deduction already deducted your income and there is no more to deduct... whew. I get it.

[Hal_Al]

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

The best thing to do is prepare a tax return (even if you aren't required to file) to accurately calculate the carry over to the next year.