Capital Loss Carry over question

[SLYKTAX]

Hi, 

If I loss $3K in 2023 stock investment, I am allowed to deduct $3,000 in my 2023 tax return and $2.7K will be carried to 2024.  Supposed I also have a $3K carried over from 2022, does that mean I can have another $3,000 deduction from my 2023 return?   

And what will be carried over loss to 2024 in this case ?  2.7K + 2.7K =$5.7K? 

If I used TT to transferred my previous return, will my total carried over be recorded/transferred automatically by TT?

Thanks

[Bsch4477]

If you had a 3000 carry over loss from 2022 and an additional loss in 2023 and no offsetting capital gains, 3000 would be deducted from your income and 3000 would be carried over to 2024. TurboTax will do it automatically based on your prior returns. 

[SLYKTAX]

Forget the number I posted earlier as it was confusing.

Say I had a capital loss of $5,000 in 2023, that mean I can deduct only $3000 and my carried over to 2024 is $2,000.

Let say, I also had a $5,000 carry over from 2022,  can I also deduct another $3,000 for 2023 tax ?  And my total carry over to 2024 is $4,000?

Where would I find my carry over from prior year in TT?

Thanks

[VolvoGirl]

I'm glad you cleared up the amounts on your first post.  I was going to ask about that.  Sorry you don't get another 3,000 for the 2022 carryover.  You can only deduct 3,000 loss per year.  The rest you would carryover.  So if you have a 5,000 carryover loss from 2022 and another 5,000 loss for 2023 that gives you a 10,000 total loss.   You can deduct 3,000 so  7,000 will carryover to 2024.

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 worksheet. There might be 2. 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.

On the income page The 2023 column shows the carryover to 2024 (not your current loss for 2023). Schedule D doesn't actually show the carryover amount. 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.

[VolvoGirl]

And if you have any gains you can use up more of the loss.  You get to first offset the loss against any gains you have each year.   Then after applying the loss to the current gains if there is still a loss, you can take a max loss of 3,000 per year. 

[SLYKTAX]

VolvoGirl:

Thanks for details explanation.  You said online version which I never used.  I have been using the TT from Costco for more than 20 years and I believed I didn't see any capital loss carryover most of the time as I have the loss to cover the deduction every year, therefore it didn't have an impact on my past tax returns. 

 I lost over $3000 most of the time every year and had $3000 deducted most of the time.   I believe I should have  enough loss carryover accumulated to cover $3,000 every year.  However, I saw in 2020 I had a capital loss deduction of $1623 which may not be right as the carryover had not been transferred from past year.  Can I go over my 20 years tax return to add up all the losses and the deductions taken and update my capital loss in 2024? Will that be an issue with IRS.

I do have gains in stocks which I haven't take the profit.   I think I should do the tax harvesting now and get my 2024 tax return come to a $3000 gain so that a deduction from carryover can effectively bring the amount close to $0 so I don't have to pay tax.  What do you think?

[VolvoGirl · Accepted solution]

Not sure I followed all that.  You should look at each year and have both those 2 worksheets.  They should be in the pdf files.  In the Desktop program you can go to Forms and find them in the list in the left column.

You can amend the last 3 years if it will make a difference.  Yes you can update the carryover amount.  But you have to start from the beginning and refigure each year before doing the next year to bring the right amount forward.

This is from the IRS Pub 550 page 66 Capital Loss Carryover

"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