Long or short term losses carrying forward.

[Careyac]

I understand I can use up to $3,000 of long or short term losses to offset dividends or interest in a tax year. If I have a greater than $3,000 loss in a year, does Turbo tax automatically apply the excess loss to the following years dividends or interest up to $3,000?

[VolvoGirl]

Yes.  And actually the 3,000 loss goes against all your income.

If you have a net loss for the year (after you subtract the losses from your gains) you can only deduct up to 3,000 (1,500 MFS) per year. The rest of the loss you have to carry over each year until it is used up. You can't skip a year. If you use Turbo Tax it will automatically carry over the loss for you.

Then in the future if you have a lot of gains you can use up more of the carryover loss.  You get to first offset the carryover loss against any gains you have each year so that can use more of it up.

[Opus 17]

Capital losses offset capital gains, not interest and dividend income.

However, if you have a capital loss that is more than your capital gains, you can deduct $3000 of that loss against any other income (wages, interest, dividends, prizes, etc.).  Any un-used loss will be carried over to next year, and used to offset any gains first.  If there is still a loss carryover after zeroing out your gains, you can deduct another $3000 against other income, and the cycle continues.  

[rjs]

The automatic capital loss carryover in TurboTax works as long as you use TurboTax every year, and transfer your information from the prior year when you start your tax return for the new year. If you use TurboTax Online the transfer will be done automatically provided that you use the same account every year. If you use the desktop TurboTax software you must have the tax return for the prior year on your computer and transfer the information when you first start your new tax return.