Why are my 1099-B gains not reflected in my total income?

[Chere-Charmante]

My net capital gain in 2017 is $121,263. 

The capital Loss carry over summary says that capital loss applied in 2017 is -$124,262.  If I can only deduct up to $3,000 of this carryover loss, why is my total income only showing $70,536 (i.e. - my 1099-B stock gains were not added to my total income).

Can this be correct?

[TomYoung · Accepted solution]

Yes, it's correct.

The carried over capital loss is first applied to any "this year" capital gains, so $121,262 of the capital loss was applied to the 2017 $121,263 capital gain.  Apparently there was still carried over capital loss available after the $121,262 was used up, so $3,000 of the remaining capital loss was applied to your ordinary income.

The $3,000 capital loss deduction limitation applies to how much of the capital loss can be applied to ordinary income.  If you'd had $0 capital gain this year then only $3,000 of the carried forward loss would have been used.  But there's no limitation on how much of the carried forward capital loss can be used to offset capital gains.

Tom Young