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yimizhang
New Member

Tax free long-term capital gain offsets short-term loss

I had a long-term capital gain of $1,000 in 2024 and a short-term loss of $2000. Since long-term gain of $1,000 falls under the 0% tax bracket, I wouldn't need that offset my short-term. However, Turbotax online automatically offsets that for me which reduces my short-term loss to $1,000. I was supposed to deduct my income by $2,000 but now I can only do $1,000. Is this expected? If not, how can I let turbotax ignore my long-term gain?

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3 Replies

Tax free long-term capital gain offsets short-term loss

TurboTax is calculating your capital gain/loss according to IRS rules. 

yimizhang
New Member

Tax free long-term capital gain offsets short-term loss

Could you elaborate on the rules? I have to apply long term gain if I want to deduct short term loss from my income?

 

Tax free long-term capital gain offsets short-term loss

Short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type are then deducted against the other kind of gain. 

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