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bears24909
Returning Member

Annualized Income Method - How to report capital Loss Carryover

I will be using the Annualized Income Method to report my earnings throughout the year. Working through my return in turbotax on that section the prompt to report my gains/Losses comes up. Turbo tax wants to me allocate the capital loss carryover over the Jan-Mar, Jan-May, Jan-Aug timeframes. Not sure how to do this since the carryover is from previous years. Please advise.

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2 Replies
DianeW777
Expert Alumni

Annualized Income Method - How to report capital Loss Carryover

it depends.  If I understand you there are capital loss carryovers each year that have not been used up.  If the amount is greater than $3,000 then you should use the $3,000 and divide it by 12, then multiply it by the number of months for each period. Once you arrive at your number for each period you would reduce your other income by that amount in each period.

 

The reason is that unless you have gains that will offset that loss, the maximum allowed will be $3,000 per year.  Of course if the loss is less than $3,000 you should use the actual amount when calculating the income reduction amount in each period.

 

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bears24909
Returning Member

Annualized Income Method - How to report capital Loss Carryover

Thankyou for the feedback. The odd thing is Turbo Tax wants me to allocate a much larger loss not just $3K. If I take your guidance it just lumps the rest of the allocation for the full year.

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