topic Capital Loss Carry Over in Deductions & credits

Capital Loss Carry Over

Doublekham — Fri, 22 Oct 2021 16:10:15 GMT

Do I have to continue to take the Capital loss Carryover until all the loss is written off or can I stop and then start it back up at a later date.

Re: Capital Loss Carry Over

rjs — Fri, 22 Oct 2021 16:15:40 GMT

You have to take the capital loss carryover every year. You cannot skip years.

Re: Capital Loss Carry Over

GeorgeDenseff — Fri, 22 Oct 2021 17:15:21 GMT

If you skip a year, then you forfeit all of the remaining carryover.

Re: Capital Loss Carry Over

fanfare — Sat, 23 Oct 2021 00:03:32 GMT

where did you get this idea?

please provide a reference.

Re: Capital Loss Carry Over

VolvoGirl — Sat, 23 Oct 2021 00:44:51 GMT

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 last 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

Also, 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.

Re: Capital Loss Carry Over

rjs — Sun, 24 Oct 2021 00:30:42 GMT

@VolvoGirl wrote:

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.

The reduction is not necessarily $3,000 each year. As stated in the sentence that you quoted from Pub. 550, you have to reduce it by the amount that would have been used if you had claimed it. That could be more or less than $3,000. The only way to know how much to subtract from the carryover is to recalculate your tax return for each year that you skipped, claiming whatever carryover would have been allowed.