Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted Jan 3, 2024 9:13:40 AM

Foreign Exchange loss realized in 2023 can be carried over for multiple years?

In 2023, I realized the loss of FX about $30,000.  I don't have capital gain.  In that case, I can deduct up to $3,000 as a minus income in 2023, right?

To carryover the remainder of the loss ($27,000) to the 2024, and later years, how I do in Turbotax?

0 3 542
1 Best answer
Level 15
Jan 3, 2024 12:18:24 PM

don't have enough information so I would suggest you go one one on one with a tax professional. These might be Sec 988 transactions that would make the loss, at least in part, ordinary and therefore not subject to the $3,000 limit for capital losses.

 

3 Replies
Level 15
Jan 3, 2024 10:21:57 AM
Level 15
Jan 3, 2024 12:18:24 PM

don't have enough information so I would suggest you go one one on one with a tax professional. These might be Sec 988 transactions that would make the loss, at least in part, ordinary and therefore not subject to the $3,000 limit for capital losses.

 

Level 2
Jan 3, 2024 1:40:09 PM

Thanks.  I found TaxAct website stating that FX trading loss is under section 988 unless I chose to opt out.  Because I have not opted out, sec 988 seems apply, not Sec 1256, and with sec 988 no $3,000 limit as you noted.   

One thing I need to confirm with pro is if I can use sec 988 as the FX company I am using is not U.S. based.  

With this basic understanding, I am more comfortable with paying a service fee to pro as 24% of $30,000 is $7,200, which is a quite saving.