topic Short term stock capital loss carryover? in Investors & landlords

Short term stock capital loss carryover?

VAer — Sun, 04 Apr 2021 23:15:19 GMT

Just making an example: if I have 43k short term capital loss in 2020 and I can only claim 3k loss for 2020 tax return. Now the question is: If I make 50k short term capital gain in 2021, can the carryover loss 40k be offset from 50k? So that I will be taxed on only 10k short term capital gain for 2021 tax return?

The reason I am asking that: I heard (someone on forum) that only 3k carryover loss can be claimed from short term capital gain each year, the person specifically mentions "short term capital gain". I doubt its accuracy, so I am asking here and hope to be familiar with the tax information.

Thanks.

Re: Short term stock capital loss carryover?

VolvoGirl — Sun, 04 Apr 2021 23:15:34 GMT

Yes! You get to first offset the loss against any gains you have each year so that can use more of it up. Then after applying the loss to the current gains you can take a max loss of 3,000 (1,500 MFS)per year. Turbo Tax does all the calculations for you. Just enter the prior year carryover amount.

If you transferred your prior return it should be already filled in.

Re: Short term stock capital loss carryover?

VAer — Sun, 04 Apr 2021 23:20:01 GMT

@VolvoGirl Please read the question again, I am asking what if I make 50k short term capital gain in 2021? Can the 40k carryover loss be claimed for 2021 tax return? Or only 3k can be claimed from short term capital gain each year (no matter how much is the short term capital gain)?

Re: Short term stock capital loss carryover?

VolvoGirl — Sun, 04 Apr 2021 23:35:12 GMT

Here is Schedule D Instructions. See the worksheet on page 11. Just change 2019 to 2020 etc.

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf

Re: Short term stock capital loss carryover?

fanfare — Mon, 05 Apr 2021 01:07:04 GMT

" If I make 50k short term capital gain in 2021".

You are an optimist.

BUT if this happens, your taxable amount will be $10,000.

Re: Short term stock capital loss carryover?

VAer — Mon, 05 Apr 2021 01:09:59 GMT

@fanfare I said the question is an example, not my case. Just want to know more information about capital loss carryover. It is merely a question, for the purpose of knowledge.

Re: Short term stock capital loss carryover?

fanfare — Mon, 05 Apr 2021 01:10:16 GMT

the rules for your state tax may be different and vary by state.

Re: Short term stock capital loss carryover?

VolvoGirl — Mon, 05 Apr 2021 01:23:29 GMT

Also look at pub 550… http://www.irs.gov/pub/irs-pdf/p550.pdf