Massachusetts Capital Loss Carryforward

[seether777]

If I have a capital loss carryforward on my federal return of $10k from sales of stock that happened many years ago before I lived in MA and now in 2019 I have MA residency and I sold stock for a gain of $10k, on my federal return I pay no capital gains tax due to the capital loss carryforward, but that capital loss carryforward is not showing on my MA state tax return in TurboTax so it is showing that I owe MA capital gains tax on the stock sale. Is that correct? Or should I be able to use my capital loss carryforward in MA too (and how do I get TurboTax to show it)? 

[JohnB5677 · Accepted solution]

It sounds like you will have to enter the MA carryover loss.  If you go through the Massachusetts questions you will find the question Do you have a carryover loss.  You will then be able to post it..  The federal and the MA will probably not match unless it was the first year.

[seether777]

Thank you for your reply!

[phod]

Hello,

I was in the same situation last Apr 2020.  However, unfortunately, I did not enter the MA carryover loss in my 2019 MA tax return.  If I enter the MA carryover loss in this year 2020 MA tax return , will this be a problem?

Thanks.

[Cynthiad66]

Yes.  You need to enter the loss or amend your 2019 MA return to claim the loss.  After 2019 there may not be a loss to carryover to 2020.  The loss should be applied to the tax years in order.

When you sell a capital asset, the difference between its cost basis and the selling price results in a capital gain or loss.

• A capital gain is when your asset's sales price exceeds its cost basis (in other words, you made money). Capital gains must be reported on your tax return.
• A capital loss is when you sell the asset for less than its cost basis. Capital losses from investments can be deducted, but not those from personal-use assets, such as your home or personal vehicle.

Your total capital gains for the year minus your total capital losses results in either a net capital gain or a net capital loss.

• Short term capital gains (gains on assets held one year or less) are taxed as ordinary income.
• Long term capital gains (gains on assets held more than one year) are taxed at a more favorable rate than ordinary income.
• Net losses are deductible, but only up to a maximum of $3,000 ($1,500 if married filing separately). Any capital losses you couldn't deduct this year can be carried forward and deducted on future tax returns. This is called a capital loss carryover.