I already have a large capital loss carryover from prior tax years.
In 2023I received a class action settlement from a security that I previously had declared worthless (by my broker) which I deposited into my bank account.
Should I simply add this positive amount to my already negative capital gains carryover to arrive at a new smaller carryover amount for 2023 taxes?
I am assuming this is the correct and appropriate thing to do.
John K
If your settlement is reported on a 1099-Misc, you may need to report the income, then reduce the amount of your Carryover Capital Loss entered on your 2023 return.
Here's more info on Capital Gains and Losses.
No 1099-misc for this settlement check. Law firm made all tax issues disclaimer. So I have just reduced the long term capital gains loss by the check amount and my resultant number is still negative. It wasn't easy in turbotax and took me a few trails to get it to go through OK. Should work out fine.
Thank you for your input.
JK