Is this capital loss carry over calculation by TurboTax correct?

[justin]

I have read several articles about capital loss carry over and the $3000 deduction limit, I, however, still feel that TurboTax's calculation for me is wrong. Please help!

My situation:

* Capital loss carry over from 2018: $10,000 (hypothetically)

* 2019 capital gain: $3,100 (hypothetically, a number higher than 3000) 

My understanding of how capital carry over should be calculated:

* I can use $3000 from my carried over capital loss to offset my gain in 2019. 

* This means that I need to pay capital gain tax only for  $3100 - $3000 = $100 in 2019.

* My capital loss carry over will be $10,000 - $3,000 = $7,000 next year.

What TurboTax calculated:

* Capital loss carry over next year is : $3,900 (which seems to be $10,000 - $3,000 - $3,100.) 

* It doesn't seems like I'm taxed for the $3,100 - $3,000 = $100 portion. 

I'm scratching my head to try to make sense of the TurboTax calculation. I mainly have two questions:

* Is the $3,000 portion being deducted twice from the capital loss carry over? 

* Can I, like TurboTax did, offset the entirety of my $3,100 2019 capital gain? If so, what does the $3,000 limit mean?

Thanks in advanced!

[VolvoGirl]

You can only take a 3,000 max loss each year and that is AFTER all the gains and losses and carryover from the prior year.

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.

[VolvoGirl · Accepted solution]

So your thinking is wrong and Turbo Tax is right.  You get to apply the whole carryover against all the current gains.  Then if you still have an overall net loss you can take 3,000 of it on your tax return and carryover the new loss amount to next year.

[RWS9]

How did Turbo Tax know to reduce my loss carry forward number by $7000 before I even entered any numbers into the forms?  Went from $105,000 to $98,000 before I even started the process.  How can this be correct?

[JamesG1]

Are you reporting Qualified Business Income Loss Carryover from a previous year?

Qualified Business Income Loss Carryover carries forward to the succeeding year and is treated as arising from a separate trade or business. Those losses carry over indefinitely until completely offset by positive QBI.

In TurboTax Online, view Qualified Business Income Loss Carryovers by following these steps. 

• Down the left side of the screen, click on Federal.
• Across the top of the screen, click on Wages & Income.
• Scroll down to Other Business Situations, click Show More to the right.
• Click Start / Revisit to the right of Net Operating Loss / QBI Carryforward Loss.
• Follow the screens to view the Qualified Business Income Loss Carryover.

[sandyh1]

I have no carry over losses from last year but a $5000 capital loss this year.  Turbo Tax is showing $3179 loss when I believe it should be $3000.

[sandyh1]

this is a personal stock loss, not business.

[VolvoGirl]

Where is it showing a 3179 loss?

On the income page The 2021 column shows the carryover to 2022 (not your current loss for 2021).  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 for next year.

There is also a 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.