topic Want to use capital loss to offset ordinary income - NOT to carry it forward in Investors & landlords

Want to use capital loss to offset ordinary income - NOT to carry it forward

starla74123 — Sun, 07 Mar 2021 18:31:10 GMT

HEllo - thank you in advance for any assistance with this. I had a net investment capital loss of about $2200 for 2020. I understand that I can use up to $3000 of that to offset regular income (all of it, obviously), and I would like to do that. I would prefer to NOT use it as a carry forward against potential 2021 gains. If I am looking at my schedule D correctly, it seems like Turbotax is automatically doing a carry forward to next year. How do I tell Turbotax to use that excess loss to reduce other income instead? I am not seeing where I can make the choice to do that, if it is a choice. Thanks!

Re: Want to use capital loss to offset ordinary income - NOT to carry it forward

JotikaT2 — Sun, 07 Mar 2021 18:22:10 GMT

TurboTax will include the capital loss on your 2020 income tax return as carried forward from your 2019 income tax return.

I recommend reviewing your capital loss carryforwards to ensure it is being picked up in the 2020 income tax return preparation as follows:

You will enter the information in the federal interview section.

Select Income & Expenses
Scroll down through all income until you see Investment income
Select Capital Loss Carryover
You can select Edit on the following screen to adjust the amounts from your capital losses from your 2019 tax return.

Re: Want to use capital loss to offset ordinary income - NOT to carry it forward

starla74123 — Sun, 07 Mar 2021 18:27:26 GMT

Hello- Thanks for taking the time to reply, but I think you may be answering a question other than the one I asked. My question has nothing to do with 2019. (As a matter of fact, I'm using TT on a new computer this year - so it doesn't even "know" about prior years. )

My question is strictly about 2020. In 2020, I sold stocks with both gains and losses, ending up with a net loss of -2200. I want to use that to offset ordinary income also from 2020. TT appears to instead be automatically applying that loss as a carry forward to 2021, which is NOT how I want to use it. How do I force TT to use it against ordinary income? Thank you

Re: Want to use capital loss to offset ordinary income - NOT to carry it forward

starla74123 — Sun, 07 Mar 2021 18:32:21 GMT

HI - I owe you an apology - I now see that I had mistakenly put "2019" in my original post! Please pardon me. I have corrected it. My question is only about 2020. thanks again and sorry for my blooper.

Re: Want to use capital loss to offset ordinary income - NOT to carry it forward

macuser_22 — Sun, 07 Mar 2021 18:43:57 GMT

@starla74123 wrote:

HI - I owe you an apology - I now see that I had mistakenly put "2019" in my original post! Please pardon me. I have corrected it. My question is only about 2020. thanks again and sorry for my blooper.

It is automatic on schedule D. The smaller of schedule D line 16 (your loss after offsetting capital gains) or $3,000 is entered on the 1040 line 7 to offset your taxable income. Anything left over carries to 2021.

Re: Want to use capital loss to offset ordinary income - NOT to carry it forward

starla74123 — Sun, 07 Mar 2021 18:50:00 GMT

Perfect - Macuser 22 - now that you've told me where to look I see it clearly! Thanks very much for your help.