Why is my entire loss carryover from 2019 (almost $40,000) being applied when the limit is $3000?

For some reason TT is using my entire loss carryover from 2019 which is almost $40,000. I thought the limit was $3000.

416

Level 15

Feb 25, 2021 5:02:53 PM

It is $3000 against ordinary income, but $40,000 against capital gains.

Level 15

Feb 25, 2021 5:27:03 PM

if you have a gain in 2020 of over $40,000 congratulations,

but that will use up your forestalled prior losses.

Level 3

Feb 25, 2021 5:43:04 PM

Thanks. I misunderstood the $3000 loss limit. This will definitely help!