Capital Loss Carry over to next year when I didn't work (no taxes are due) and the following years

[kakazulu]

If anyone could help me out here I would really appreciate it...I am totally lost. 

I am quite behind on my taxes and trying to figure out how a capital loss would carry over to following years that I did not work.  On my schedule D  from 2010 Iine 7 I have a $5,506 loss.....which would leave me with $2506 loss as a carry over for the next year in 2011 (since I am using $3000 of that in 2010)

I did not work in 2011 and  I know I have to file a return in order to carryover the loss...but my main question is, do I have to use that $2506 on my 2011 return when I had no income and effectively just throw it away? Or can I carry it over to the next year I worked in 2013 ?? And if so, what do I write in box 13 of my 1040 for 2011?? 

Any help would be amazing. Thanks!

[fanfare]

This is all done on a worksheet

enter your carryover of 2506 as a LT or ST carryover from 2012 when doing your 2013 return.

What happens next depends on whether you had capital gains or losses in 2013

You don't have to file a 2012 return if you had no income..

[kakazulu]

Thanks so much for answering! I probably should have mentioned that the reason I was going to file in 2011 and 2012 return even though I had no income was because I had additional stock losses those years and wanted to include those in future filings (2013 & beyond)...so I believe that I do have to file even though I didn't work correct?   

And then what do I write on line 13 on my 1040 for the 2011 tax year ?? Leave it as zero? Or do I have to use the loss that year and not be able to carry it over? That is what is totally confusing me. Thanks

[fanfare]

the thing is if you have no income you  - usually -  don't lose your carryover at the rate of $3000 per year.

So ...

just revise my answer to change the amount 2506 to

2506 + loss in 2011 + loss in 2012.

[VolvoGirl]

No you don't have to file to keep carrying over a loss.  

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 or file a 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.

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

"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. "

BUT you might not have to reduce the carryover to the next year.  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.

So if you didn't have any taxable income, If you have a negative AGI or negative taxable income read Pub 550 page 66 on Figuring your Carryover.  So even though it shows it on 1040 it doesn't reduce the carryover to the next year.

http://www.irs.gov/pub/irs-pdf/p550.pdf

[Anonymous]

are you sure you really used $3,000 of your capital loss in 2010?  the $3,000 loss carries to page 1 of the 1040 regardless of whether you use it or not.  so if taxable income before exemptions for that year is negative reduce the capital loss usage by the negative amount of taxable income before exemptions but not more than $3,000.   

in any case, the loss carryover gets carried to 2011 and since you say you have no income only capital losses, you use none of them even though $3000 will appear on page 1. then on to the next year and so on.  basically the same rule applies in every year. if your taxable income before exemptions is negative, you have to refigure to determine how much if any of the capital loss is used. 

i have included a link to prior year forms

https://www.irs.gov/forms-pubs/prior-year

there is a capital loss carryover worksheet in each year's instructions for schedule d  for 2010

https://www.irs.gov/pub/irs-prior/i1040sd--2010.pdf

[VolvoGirl]

You probably don't have to actually file old returns but you can fill out the 1040 and schedule D to keep in your files to document your income (or lack thereof)  and the carryover amount.

You can get the old forms here.  Type 1040 in the search box.

https://apps.irs.gov/app/picklist/list/priorFormPublication.html;jsessionid=rkgZR0fuVc00xFDahvT4qyax... 

[kakazulu]

Thank you everyone! I didn't think anyone would respond...this was great! 😀