Excess carryover of capital losses from previous years

[ras5028]

I am 76 years old. I have large capital losses in taxable accounts that are carried over from previous years and of course this year has only made them worse. Although I am doing well on my investments in my IRAs, I can't seem to book many capital gains in my taxable accounts. What happens to these loss carryovers when a taxpayer dies? It is only possible to recognize a net $3000 loss in any year and as far as I can recall this amount is never adjusted for inflation. I'm afraid I won't live long enough to work them off. Does the IRS just keep this money when a taxpayer dies? Thank you to anyone who can answer this.

[Anonymous_ · Accepted solution]

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@ras5028 wrote:

Does the IRS just keep this money when a taxpayer dies? 

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Unfortunately, that is essentially the way it works; unused capital losses are lost when a taxpayer dies (property owned by the decedent, and included in the gross estate, typically is stepped up to its fair market value on the date of death).

If you can generate capital gains from any other investments, you can use your capital losses to offset the gains (and then the extra $3000 which, by the way, has not been adjusted for inflation in the recent past).