is it required to report capital loss on line 7

[bbxrider]

if income up to line 7 is zero, so there is no tax to that point, is it required to post capital losses? thus losing the loss for a later year when needed?

[VolvoGirl · Accepted solution]

That's ok, 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.

There is a Carryover Worksheet. 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.

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 and Carry Forward worksheets.

In the Desktop program you can go to Forms and find it in the list in the left column.

[Mike9241]

What about any income on line 8 of 1040? it can be offset by capital loss. If you have a net capital loss and don't enter it any carryforward will be permanently lost. There also could be an issue. if a 1099-B was issued. the gross proceeds the IRS has on file won't agree with your return which could cause a notice to be issued. 

[Hal_Al]

Q.  Is it required to report capital loss on line 7?

A. Yes. 

As explained by others, your capital loss carryover will not be lost.  TurboTax (TT) will prepare a capital loss carry forward work sheet. If you use TT next year, the capital loss will automatically carry over to the 2023 tax return. 

Also, as explained by others, the capital loss is applied to income on line 8 of form 1040. 

Basically, you are allowed to use your standard or itemized deductions to reduce your taxable income before having to use your capital loss.

 If your standard (or itemized) deduction is greater than AGI, without capital loss, then all capital loss is carried forward.

More explanation at:

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/on-2018-i-had-0-incom...