Over $3000 capital loss

Forum|Forum|5 years ago
March 15, 2021
2 replies
33 views

Hello, I had about $4000 in capital losses on my stocks last year. Those were the only capital gain/loss I had. When I added it up in schedule D and my 8949 forms they came out to be $4000. When I report it in line 7 of the 1040(capital gain and losses) do I use that -$4000 or do I use -$3000 since I heard the most you can deduct is -$3000. I want to file independently, so I did not want to use the software.

phildonnia1

Level 5

The largest negative amount that can ever appear on Form 1040, Line 7 is -$3000.

Don't rely on "what you've heard". If you're following the directions for Schedule D, you'll see the limitation clearly described for Schedule D, Line 21.

Remember, you still have the remaining $1000 loss. In the future, if you have a capital gain, you can reduce it by this amount. So keep a record of your "carried-over" losses for next year.

Good luck on your "manual" filing. It can be a lot of work, but it will bring you a good understanding of how taxes work. I would recommend at least using some kind of software to check your work.

RayW7

Alumni - Intuit

I agree with Phildonnia and just want to add-

If a taxpayer's capital losses are more than their capital gains, they can deduct the difference as a loss on their tax return. This loss is limited to $3,000 per year, or $1,500 if married and filing a separate return

If you have capital losses of more than $3,000, TurboTax will automatically deduct $3,000 from your ordinary income and carry forward the balance. You do not need to do anything.

In addition if you file with TurboTax the following year this loss will automatically carry forward. This can save a lot of time and reduce the chance for error.

-for more information follow this link-

Capital Gains and Losses - TurboTax Tax Tips & Videos

What is a capital loss carryover?