Capital Loss Carryforward Worksheet

[geauxbro]

Hi,

For my 2021 taxes when I get to the capital loss carryover section using TT Premier 2021; I am prompted to enter the carryover amounts from 2020.  To fill out the fields for short and long term capital loss carryover for both the Regular Tax and AMT I referenced the "Capital Loss Carryforward Worksheet from my 2020 return.

First Question: is this the correct form to use to populate these entries?

Second Question: using the"Capital Loss Carryforward Worksheet from my 2020 return; the LT cap loss carry forward to 2021 for Regular Tax shows $2,361 and AMT shows $0. So, on the 2020 return the same value of $2,361 was used on form 1040 Line 7 as a cap loss (-$2,361).  Is it correct that the same exact amount of $2,361would carry forward to 2021 as a LT cap loss as well? I am presuming this could be correct because TT 2020 form 1040 Line 15 taxable income showed ZERO but actually calculates as -$8,886 and so if I were to add back the $2,361 LT cap loss to the -$8,886 of taxable income the result would still calculate out to a negative taxable income at -$6,525 possibly justifying the duplicate carry forward to 2021.

Please advise based on the two questions above.

Thanks,

Audy

[JohnB5677]

Yes, you're right.  Surprisingly your capital loss carryover is reduced by the amount of capital loss that was actually used to reduce your taxable income, not by the amount of capital loss deduction shown on your tax return.  The $3,000 deduction will be posted to your return.

You’re allowed to use all other deductions before using the capital loss deduction. This rule is reflected in a Capital Loss Carryover Worksheet that appears in the instructions for Schedule D and also in

IRS Publication 550

it is listed in the contents under  Capital loss carryover.

[geauxbro]

Hi JohnB5677,

Thanks for taking your time to help me  understand this.

geauxbro