Capital Losses less than income

[iyerks111]

Hello

My daughter had an income of $650 in 2023, but had $6,000 in capital losses from the sale of stocks. So her AGI was negative 2,350, after the 3,000 capital loss that is allowed every year. Another 3,000 loss has been carried forward to next year. However, it seems like I am getting no benefit for taking the loss last year. Is that the way it is supposed to be, or is there a way to NOT take the 3,000 loss when filing taxes this year and move the entire 6,000 to next year, when I think her income will be more than 6,000, so she can benefit from the full 6,000 loss. Thanks in advance.

[VolvoGirl · Accepted solution]

Yes the whole amount can carry over.  It's good.  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.

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.

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.

[iyerks111]

Thanks. That was very helpful.