topic Capital gain loss carryover offsetting $22k stock gains. 1040 line 43, <15% tax bracket, cap. gain rate is 0%. Any way of NOT using loss carryover? Other income SS $19K. in Investors & landlords

Capital gain loss carryover offsetting $22k stock gains. 1040 line 43, <15% tax bracket, cap. gain rate is 0%. Any way of NOT using loss carryover? Other income SS $19K.

hy2a3 — Tue, 04 Jun 2019 18:55:07 GMT

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I have long term Capital Gain Loss Carryover of $80000. On the 1040, my only income are (1) line 13 long term capital gain from stock of $21000 and (2) line 20 social security benefits of $19000. Married and filing jointly. We are taking standard deduction. To my rough calculations, we are either in the 10-15% tax bracket, so capital gain tax rate should be 0% on the $21k. Question: Why is TurboTax using my using $21K of our $80k carryover to offset the line 13 gains? I really would not need to utilizing my carryover since my tax bracket puts us in the 0% for capital gain tax. Thanks.

I can’t tell if you will have a negative taxable income....

VolvoGirl — Tue, 04 Jun 2019 18:55:09 GMT

I can’t tell if you will have a negative taxable income.  But if you do......
If you have a negative AGI or negative taxable income read Pub 550 page 69 on
Figuring your Carryover.  So even though it shows it on 1040 line 13 it doesn't reduce the carryover to the next year.
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p550.pdf">http://www.irs.gov/pub/irs-pdf/p550.pdf</a>

You can see it on the Carryover Worksheet. 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.

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 and Carry Forward worksheets.

Mechanically, the carried over loss is applied to any cur...

TomYoung — Tue, 04 Jun 2019 18:55:10 GMT

Mechanically, the carried over loss is applied to any current year capital gain, irrespective of whether that capital gain would be taxed at 0% (which only applies to long term capital gain, not short term capital gain), or not.

You say you have a capital gain from the sale of stocks of $21K-$22K and for sake of argument let's say that every sale of every stock was sold at a gain. But if during the year you sold one more security and this security sale resulted in a $5K capital loss, then your net capital gain for the year would be in the $16K-$17K range, and I expect you wouldn't be posting here asking why that $5K loss is being offset against your $21K-$22K gains. The carry over loss is being used in the exact same fashion that a current year loss would be handled. There's really no option to "defer" that loss until some day when you might "really" need it.

Tom Young

Dear Tom, Thank you for the reply, directly answering my...

hy2a3 — Tue, 04 Jun 2019 18:55:11 GMT

Dear Tom, Thank you for the reply, directly answering my1040 tax question. The Best.

topic Capital gain loss carryover offsetting $22k stock gains. 1040 line 43, &lt;15% tax bracket, cap. gain rate is 0%. Any way of NOT using loss carryover? Other income SS $19K. in Investors & landlords

Capital gain loss carryover offsetting $22k stock gains. 1040 line 43, <15% tax bracket, cap. gain rate is 0%. Any way of NOT using loss carryover? Other income SS $19K.

I can’t tell if you will have a negative taxable income....

Mechanically, the carried over loss is applied to any cur...

Dear Tom, Thank you for the reply, directly answering my...

topic Capital gain loss carryover offsetting $22k stock gains. 1040 line 43, <15% tax bracket, cap. gain rate is 0%. Any way of NOT using loss carryover? Other income SS $19K. in Investors & landlords