Losses incurred from sale of stock

[juham2013]

Hi,

I have been using Turbo Task Desktop (Home & Business) for many years.  In tax-year 2024, I incurred losses from sale of stock, but they don't automatically carry over as I assumed or their impact doesn't show.  Personal information was successfully imported from tax-year 2024.   

I just started keying in the numbers (W2) for tax-year 2025 so, perhaps the loss carry-over doesn't impact the return and will only do so when I get to investments portion?

I am living in Texas and file "Married Jointly" as it has been for many years.

Awaiting comments!

Cheers,

JJ

[ThomasM125]

I believe you are referring to a capital loss carryover. It can be deducted against net capital gains in the current year and any excess up to $3,000 can be deducted against ordinary income. I suggest you look on line 7(a) on your Form 1040 to see if you show a capital loss there. If not and you have capital gain income that you reported in excess of the loss carryover from 2024, it would have been used up there.

Otherwise, you can enter the amount of your loss carryover in the Wages and Income section of TurboTax, then Investment Income, then Capital Loss Carryover.

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online while working in your program
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done

[juham2013]

Hi,

I appreciate the response.   NOTE: I do not use the on-line version!

My capital loss is way more than $3,000, but I believe that $3,000 is the max that can be deducted against income in any given tax year (as you were alluding to). Anything in excess of $3,000 should carry over automatically to a following tax-year, correct?   I believe that losses carry over "indefinitely" for an individual tax payer.  I believe my capital losses did carry over,  long time ago when I had a similar situation.

What is the point of using software if one needs to do things manually?    Perhaps the simple explanation is that I have not yet entered ANY form of income or taxes paid so far and I am getting ahead of myself?

Cheers,

JJ

[ThomasM125]

Yes, any unused capital loss should carryover to the next year automatically in TurboTax. As such, a manual entry should not be required. 

It does carry over until it can be used in a future year. Since you have the Forms option in your desktop TurboTax, you can look on Schedule D, lines 6 or 14 to see if the carryover loss from the previous year is reflected there. If not, you can look at the Federal Carryover Worksheet to see if it was listed there and if so how the current loss carryover is calculated.

If you determine the loss carryover is not on your 2025 return in error, you would have to look at your prior year return to see if there was an issue there. 

As I mentioned previously, you can enter the correct carryover loss amount in the Investment Income section of TurboTax. 

[juham2013]

Filing Married Jointly

I had a total capital loss of $7,379.00 in tax-year 2024  (the gain of $6,700.00 was of the net short-term type and losses of $14,079.00 were of the net long-term type).   Capital loss carryover to tax-year 2025 was thus $4,379.00, but only $3,000 can be used.  $4,379.00-$3,000.00=$1,379.00 would carry over to tax-year 2026, right (adjusted based on whether there was a loss or gain in tax-year 2025)?

In tax-year 2025, I had a gain of $3,175.83 (total gains of $7,920.83 were again of the net short-term kind and losses of $4,745.00 were of the net long-term kind).  So, total gain was $7,920.83-$4,745.00=$3,175.83.  Now, the capital gain in tax-year should be $3,175.83-$3,000.00 (carryover from tax-year 2024)=$175.83, correct? In the Desktop version of TT, it says that there is the carryover loss is 0 to tax-year 2026.   Shouldn't it be $1,379.00 (this is the amount in excess of the allowable $3,000.00 single year carryover)-$175.83=$1,203,17?

Cheers,

JJ

[VolvoGirl]

No, it used it up.  Each year you get to first offset the carryover loss against any and all gains you have each year so that can use more of it up. Then after applying the loss to the current gains if there is still a loss, you can take a max loss of 3,000 per year. 

[VolvoGirl]

Check Schedule D line 6 and 14 and the  2 worksheets….
Capital Loss Carryover worksheet showing the carryover from the prior year and the current amounts.
Capital Loss Carry Forward worksheet showing the amount transferring over to next year.

In the Online version you have to save your return with all the worksheets as a pdf file to your computer to see the Capital Loss worksheets. You need to use Online Premium to enter a Capital Loss Carryover and investments. Or any of the Desktop programs. In the Desktop program you can switch to Forms Mode and open the worksheets.

[juham2013]

Thank you!

I am using a Desktop version of TT.

I was under the illusion that capital income losses carry over indefinitely,  till it is used up.

Cheers,

JJ