Should I amend my 2023 return?

Forum|Forum|1 year ago
February 17, 2025
1 reply
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Hello,

I just realized while working on my 2024 (Not filed yet), that I totally missed updating the cost basis for my ESPP sold in 2023. I should have used the adjusted cost basis, but instead, I left it as is from the 1099-B form. I basically double taxed myself. This resulted in a loss of about $2k. I currnetly carry a loss of 32K, but if I amend, the loss would go to $34K. However, I am unsure if A) Whether to amend my 2023 or just leave it alone since it is not anything I owe the IRS. Or B) Amend, but then do I wait until the amended return is accepted before filing the 2024 to reflect the accurate data from the 'previous year'.

Also, do I also amend Arizona state return as well?

ThomasM125

Level 15

You should amend the 2023 return as you can't take the additional loss deduction properly without first adding it to the 2023 return. Even though it is not immediately deductible, you may be able to deduct it in future years, but you must carry it over properly. You don't need to wait until you amend the 2023 return to file your 2024 return as long as you enter the correct loss carryover on it.

You should prepare the Arizona amended return to see if the tax changes but you don't need to submit it if there is no change in tax, as that return does not track loss carryovers.

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Snowy_DesertAuthor

Level 5

Thank you so much! Quick follow up question, regarding ‘You don't need to wait until you amend the 2023 return to file your 2024 return as long as you enter the correct loss carryover on it’. Should I start 2024 from scratch and use the amended 1040X so it pulls the correct carry over loss number from 2023? Or is there another manual way to add that $2k loss in the 2024 return?

Snowy_DesertAuthor

Level 5

No, you will not get an error for adjusting your carryover.

Here is an article you may find helpful: How do I enter my capital loss carryover?

Additionally, TT is telling me that it is not detecting any differences between my original 2023 and the amended one and it is asking me to put an explanation which I did, but I am now wondering if amending is absolutely necessary? I'd rather not amend and go through the hassle unless I am absolutely required.