If I have a $10,000 cap loss carried forward from last year, and cap gains this year of $12,000, can I offset $10,000 of this year's gains with the carried-over loss?

[VolvoGirl · Accepted solution]

Yes.  You get to first offset the loss against any gains you have each year so that can use more of it up.  Then after applying the loss to the current gains you can take a max loss of 3,000 (1,500 MFS)per year.  Turbo Tax does all the calculations for you.  Just enter the prior year carryover amount.

If you transferred your prior return it should be already filled in.

[rjs]

If you have a $10,000 capital loss carryover and capital gains of $12,000, the entire $10,000 capital loss carryover will be used to offset $10,000 of the capital gains. There will be no loss left to offset other income or to carry over to the next year.

As VolvoGirl said, the offset will happen automatically. All you do is enter your investment sales that produce the gains, and enter the capital loss carryover if TurboTax does not carry it over automatically.