How do I prevent the application of a tax loss carryforward?

[TaxDonor]

TurboTax automatically applies my tax loss up to $3000 on my income but how do I set this to $0 and preserve it for next year? My income in the current year is too low for this to matter so I'd like to preserve it for next year. 

Under Investment Income, Capital Loss Carryover, on the screen for Allowable Loss, it shows -$3000. I set it to $0 but it still appears on my 1040 as -$3000.

[Mike9241]

you can't. up to $3,000 of net capital loss including any carryforward must be used each year. If your adjusted gross income for a year is negative, then the amount used is $3,000 less negative AGI (line 11)  (not more than $3,000. Tutbotax will properly compute your 2023 capital loss carryforward available for 2024.

[Bsch4477]

You can’t choose to preserve the loss. 

[TaxDonor]

Thanks for your quick reply. I thought the IRS didn't require me to apply the tax loss carryforward. Is that wrong, or is this a limitation in TurboTax?

I was confused by this thread which says it's optional:

https://ttlc.intuit.com/community/taxes/discussion/do-i-have-to-use-a-capital-loss-carryforward-even...

[VolvoGirl · Accepted solution]

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 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.

But 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.

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

"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. "

IRS Pub 550 https://www.irs.gov/pub/irs-pdf/p550.pdf

On the income page The 2023 column shows the carryover to 2024 (not your current loss for 2023). 

Schedule D doesn't actually show the carryover amount. To find your Capital Loss Carryover amount you need to look at your return schedule D page 2. Line 16 will be your total loss and line 21 should be a max loss of 3,000. The difference between line 16 and 21 is the carryover loss.

If you used the desktop version or have the complete pdf of your last year's return you might have the Capital Loss CO (carryover) worksheet that will tell you the amount.

In the Online version you have to save your return with all the worksheet as a pdf file to your computer to see the Capital Loss carry over worksheet. There might be 2. There is a Capital Loss Carryover Worksheet showing the carryover from the prior year and the current amounts. Then there is also the Capital Loss Carry Forward worksheet showing the amount transferring over to next year.

[TaxDonor]

Got it. Thank you very much. The real solution is to make more money to use the losses.