Turbotax bugs in capital loss carryover

[tzpow]

So. I filled my 2022 tax return with Turbotax. I have over 50K  capitol lost for year 2022. I am filling my 2023 tax return and it applied all $50K lost from 2022 as a deduction. It should have been $3000. Anyone knows how to fix it? 

[ThomasM125]

The capital loss from 2022 can be applied to capital gains in 2023 and an additional $3,000. I suggest you look on your Form 1040 on line 7 where your net capital gain income or loss would appear. It could not be less than a $3,000 loss. Unless you had $50,000 or so in capital gains in 2023, your total capital loss carryover was not deducted in 2023. Look on your Form 1040 and see if all items of income you entered are reported properly there. Your deductions would typically be the standard or itemized deduction reported on line 12. After you pay for your TurboTax program you can look on your schedule D and you will see the capital loss carryover from 2022 on line 6 or 14 and you can look at the rest of the schedule to see how your capital gains and losses in 2023 are handled.

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done 

[VolvoGirl]

Did it carryover the full 2022 loss without reducing it by $3,000?  That can happen.  If you have a negative AGI or negative taxable income it will show up on 1040  BUT it won't reduce the carryover to the next year.

The current year carryover loss from the prior year is on schedule D line 6 & 14.

On the income page The 2023 column shows the carryover to 2024 (not your current loss for 2023).  Schedule D doesn't actually show the carryover amount. To find your  Capital Loss Carryover amount  you need to look at your  return schedule D page 2.  Line 16 will be your total loss and line 21 should be a max loss of 3,000.  The difference between line 16 and 21 is the carryover loss for next year.

There is also a Carryover Worksheet showing the carryover from the prior year and the current amounts.  Then there is also the Capital Loss Carry Forward worksheet showing the amount transferring over to next year.

In the Online version you have to save your return with all the worksheet as a pdf file to your computer to see the Capital Loss Carry Over and Carry Forward worksheets.

[Mike9241]

among the worksheets and forms for 2022, there should be a worksheet computing your capital loss carryforward.

[mars-man]

This has happened to me too. Definitely looks like a bug. And I can't figure out how to edit it down to the $3,000 carryover max.

[VolvoGirl]

@mars-man  Why do you think it's wrong?  What is on  your 1040 line 7?  That can only have the 3,000 loss max.  But you can still use up more of the carryover loss from last year.  No one has had any problems with it.  It is working right.  

[mars-man]

Thanks for your reply. Turbotax is showing a capital loss carryover from 2022 of $45,667, resulting in a gain of $5,922 on line 7 when actually our gains for 2023 were in the mid-$50,000 range.

[AnnetteB6]

The loss is carried over until it can be used.  The limitation of claiming $3000 of the loss per year only applies if there is not a gain being reported that can be reduced by the losses that are carried into the current tax year.

In your case, you said your gains were in the mid-$50,000 range and your carryover loss was less than that amount.  That means that all of your carryover loss was applied to your gains for 2023 which resulted in you only being taxed on a gain of $5922 instead of a gain over $50,000.  

@mars-man 

[mars-man]

Wow, that is good news. I thought the $3000 carryover cap was an iron-clad rule whatever the next year's gain. Shows what I know...? Thanks for chiming in!