Capital loss carryover

[akaemjay]

Hello....I had about 7000 capital loss in 2021 which I filed as capital loss 3000 in filing my tax..

I forgot to include 3000 carryover in my 2022 tax return but would like to use it this year (2023) weather it's 3000 or remaining1000.

Do I need to amend my last year's tax to include 3000 in order to use remaining 1000 in  2023?

Or can I use 3000 this year and 1000 next year?

Thank you,

[AnnetteB6]

Yes, you would need to amend your 2022 return in order to claim $3000 loss for 2022 and $1000 loss for 2023.  Otherwise, you will miss out on that $3000 loss because it is not allowed to 'skip' a year and carry the loss forward.  

Whether you amend 2022 or not, you only have $1000 remaining for 2023.  

[akaemjay]

Aha thank you for the reply!

is it okay if I don’t amend 2022 and just go ahead and  use 1000 loss for 2023?

or in order to use 1000 I have to amend 2022 to consecutively use all the loss on the record?

thank you 🙂

[VolvoGirl]

You don't need to amend 2022 but you probably should to get credit for it.  It may change your return and refund.  And did you have any sales or gains in 2022?  That would use up more of the carryover.

You have to report the carryover every year until it's used up. You can't skip a year. Even if you don't report it on your return you have to reduce it by the 3,000 (1,500 MFS) when you carry it over to next year. You can't choose when to use it.

But if you have a negative AGI or negative taxable income it will show up on 1040 BUT it won't reduce the carryover to the next year.

This is from the IRS Pub 550 page 66....

"When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. "

IRS Pub 550 https://www.irs.gov/pub/irs-pdf/p550.pdf

[AnnetteB6]

To be sure that your 2023 return is accurate, you need to amend your 2022 return.  

There may have been capital gains reported in 2022 that would have been offset by your carryover losses and the amount carried to 2023 may not be what you expect it to be.  It is possible that there is nothing left to carryover to 2023 if there were gains reported in 2022.  

@akaemjay