Capital Loss Carryover

[jmkather]

I already have a large capital loss carryover from prior tax years.

In 2023I received a class action settlement from a security that I previously had declared worthless (by my broker) which I deposited into my bank account.

Should I simply add this positive amount to my already negative capital gains carryover to arrive at a new smaller carryover amount for 2023 taxes?

I am assuming this is the correct and appropriate thing to do.

John K

[MarilynG1]

If your settlement is reported on a 1099-Misc, you may need to report the income, then reduce the amount of your Carryover Capital Loss entered on your 2023 return.  

Here's more info on Capital Gains and Losses. 

@jmkather 

[jmkather]

No 1099-misc for this settlement check. Law firm made all tax issues disclaimer.  So I have just reduced the long term capital gains loss by the check amount and my resultant number is  still negative.  It wasn't easy in turbotax and took me a few trails to get it to go through OK.  Should work out fine.

Thank you for your input.

JK