Capital Loss classifications

epiciocc12 — Wed, 11 Jun 2025 21:25:24 GMT

Say in year 1 I had $1500 Short-term loss and a $1000 Long-term loss. In year 2 are the losses still categorized?

Meaning can I only apply gains from each type (short-term/long-term) to the same type of loss from previous year?

So, if in year 2 I have $2000 Short-Term gain and $500 Long-term gain, Will I be able to cancel out all my gains from year 2 with the carryover losses from year 1?

Thanks,

Re: Capital Loss classifications

Mike9241 — Thu, 12 Jun 2025 00:16:45 GMT

the type does not change when carried forward. however, there is an order to how current year gains are applied

first the current year type of gain is applied to that type of CLCO. so short term gains are applied to ST CLCO and long term gains are applied to LT CLCO.

then if both types are still net losses ST are used first against regular income up to $3000. if one is a loss and one a gain the loss type is applied to the gain type.

so in your situation for the current year you have net STCG of $500 and $500 of LTCL

thus the LTCL is applied against the STCG resulting in a net of zero

topic Capital Loss classifications in Investors & landlords

Capital Loss classifications

Re: Capital Loss classifications