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2020 Capital Loss Carryover

SOLVEDby TurboTax17Updated 2 weeks ago

Because of an error in a TurboTax calculation, you may have underreported your capital loss on your tax return, leading to a possible overpayment of tax and/or an understatement of capital loss carryover to 2021.

We fixed the issue in TurboTax and we want to make sure your tax return is complete and accurate. We recommend you check to determine whether there's a change in the carryover amount, and, if necessary, amend your tax return. There are no additional fees for checking your TurboTax return or for preparing an amendment.

We continuously strive to provide correct and accurate calculations in our TurboTax products. Sometimes that effort results in our finding errors after returns have been filed. We sincerely apologize for any inconvenience this may cause you.

To amend your return in TurboTax, follow these step-by-step instructions:

  1. Write down the original refund or balance due amount from your federal tax return. We recommend you check the paper/PDF copy of your return or your banking records to verify the correct amount. You'll also need your 2019 tax return and Schedule D.
  2. Log in to the TurboTax account where you prepared your 2020 return.
  3. In Tax Home, scroll down to Your tax returns & documents and choose 2020. Select Amend (change) return and then select Amend Using TurboTax Online.
  4. On the OK, let’s get a kickstart on your 2020 amended return screen, choose TurboTax sent me an email, and then Continue.
  5. On the What did we contact you about? screen, choose Something else and then Continue.
  6. On the Tell us which returns you want to amend screen, choose I want to amend both my federal and state returns, and then Continue. Your refund/balance due tracker will usually reset to $0. This is normal.
  7. On the Here’s the info for your amended federal return screen, scroll down and select Update next to Capital Loss Carryover.
  8. On the Here’s what we have for you screen, select Edit by Info from your 2019 tax return.
  9. On the Great, we’ll guide you, starting with some info from your 2019 tax return screen, review, and if necessary, correct the pre-populated info for the capital gains and losses using your 2019 Schedule D. Note: You'll need your 2019 tax return. Locate Schedule D and review the capital gains and losses on lines 7, 15, and 21.
  10. Using your 2019 tax return again, locate Form 1040. Write down the following entries shown on your Form 1040.
    1. Adjusted gross income: line 7. Can be positive or negative.
    2. Standard deduction or itemized deductions: line 8.
    3. Qualified business income deduction: line 9.
    4. If a (Adjusted Gross Income: line 7) is a:
      1. positive number, subtract b and c from a, and enter the total in the box next to the Income line. Then select Continue.
        1. Example: If line 7 is $10,000, line 8 is $24,000, and line 9 is $50, then you would subtract line 8 and line 9 from line 7 (10,000-24,000-50 = -14,050). The total to be entered would be -$14,050.
      2. negative number, add line 7 as a whole number (don't include the - sign), line 8, and line 9 together, and then enter the total with a - sign (negative number) in the box next to the Income line. Then select Continue.
        1. Example: If line 7 is -$10,000, line 8 is $24,000, and line 9 is $50, you would add together $10,000, $24,000, and $50 (10,000+24,000+50 = 34,050). You would enter the total as -$34,050. Note: Be sure to enter the total amount as a negative number.
  11. On the You probably don’t, but we have to ask - do you have different amounts for AMT? screen, if you received a copy of Schedule D in a prior year that had a label at the top reading Alternative Minimum Tax, For AMT Purposes Only, then your capital loss may be different for AMT. If you don’t recall seeing this, then it’s likely that you don't have a different capital loss carryover for AMT. If you don't recall seeing this form, select No, I didn’t, and then Continue.
  12. On the One last thing - what was your AMT income? screen, you can find your alternative minimum taxable income on Form 6251, line 4 of your 2019 tax return. Then Continue.
  13. On the Based on the info you entered, we’ve calculated your capital loss carryover amounts screen, review the totals and select Continue.
  14. On the Good work, we got your capital loss info. Looks like it won’t affect your taxes this year screen, select Done. Note: The change may not impact your current tax liability; however, your capital loss carry forward has been recalculated and an amended return needs to be filed to report the corrected amount to 2021.
  15. On the Wages and income screen, select Wrap up income.
  16. Select Continue until you reach the Here’s the info for your amended federal return screen, and then select Done.
  17. On the Tell us why you’re amending your return screen, enter TO CORRECT SCHEDULE D CAPITAL LOSS AMOUNTS, and then Continue. You may next see a screen asking that you verify your mailing address or a screen regarding the Presidential Election Campaign Fund. Make the appropriate entries and select Continue.
  18. On the Do any of these less common situations apply to you? screen, indicate if any apply. Otherwise, choose None of these apply to me. Then select Continue.
  19. On the Let’s get started on your state taxes screen, select Continue and then Edit by your state return. Follow the instructions to amend your state return. No additional info will need to be included.
  20. On the Let’s comb through your returns one last time with completecheck screen, choose Check My Info. Review any final warnings and fix any errors. If you make any changes at this stage, be sure to run completecheck again until there are no new warnings to fix.
  21. Save the amended return(s) for your records.
  22. Follow the TurboTax instructions to e-file and/or mail the amended return(s).
  1. Write down the original refund or balance due amount from your federal tax return. We recommend you check the paper/PDF copy of your return or your banking records to verify the correct amount. You'll also need your 2019 tax return and Schedule D.
  2. Launch TurboTax and open your 2020 return.
  3. Before you make any changes, select File and Save As..., and then add Amended 2020 return to the file name to preserve your original return.
  4. Select Online and Check for Updates. Allow the program to update if any are available.
  5. Select the Federal Taxes tab (Personal tab if you’re using Home & Business) and then select Other Tax Situations. You may be asked to answer a few preliminary questions before you see a list of categories. Scroll down to Other Tax Forms and select Start next to Amend a Return.
  6. On the We’ll help you change (amend) your return screen, select Continue. Then on the Did you already file your return? screen, select Yes, I have already filed my return. Then select I was contacted by TurboTax and told I may need to amend for some other reason, and then Continue.
  7. On the Tell us which returns you want to amend screen, choose I want to amend both my federal and state returns, and then Continue. Your refund/balance due tracker will usually reset to $0. This is normal.
  8. On the What do you need to change on your return? screen, select the Personal Income tab.
  9. On the How Do You Want to Enter Your Personal Income? screen, select I’ll choose what I want to work on.
  10. On the Your 2020 Income Summary screen, scroll down to Investment Income and select Start next to Capital Loss Carryover.
  11. On the Do you know your capital loss carryover amounts? screen, select Yes, I’ll review the amounts used to figure out my carryover now. (Recommended based on info we transferred in from your 2019 return.), and then Continue.
  12. On the Let’s get some info from your 2019 tax return screen, review and, if necessary, correct the pre-populated info for the capital gains and losses using your 2018 Schedule D. Note: You'll need your 2019 tax return. Locate Schedule D and review the capital gains and losses on lines 7, 15, and 21.
  13. Using your 2019 tax return again, locate Form 1040. Write down the following entries shown on your Form 1040.
    1. Adjusted gross income: line 7. Can be positive or negative.
    2. Standard deduction or itemized deductions: line 8.
    3. Qualified business income deduction: line 9.
    4. If a (Adjusted Gross Income: line 7) is a:
      1. positive number, subtract b and c from a, and enter the total in the box next to the Income line. Then select Continue.
        1. Example: If line 7 is $10,000, line 8 is $24,000, and line 9 is $50, then you would subtract line 8 and line 9 from line 7 (10,000-24,000-50 = -14,050). The total to be entered would be -$14,050.
      2. negative number, add line 7 as a whole number (don't include the - sign), line 8, and line 9 together, and then enter the total with a - sign (negative number) in the box next to the Income line. Then select Continue.
        1. Example: If line 7 is -$10,000, line 8 is $24,000, and line 9 is $50, you would add together $10,000, $24,000, and $50 (10,000+24,000+50 = 34,050). You would enter the total as -$34,050. Note: Be sure to enter the total amount as a negative number.
  14. On the We need some info from the 2019 Schedule D you used for AMT screen, review and if necessary correct the pre-populated info using your 2018 Schedule D for AMT. Then select Continue.
  15. On the We need one last item from your 2019 Form 6251, you used for AMT screen, review the amount shown, and then select Continue.
  16. On the Capital Loss Summary screen, select Continue.
  17. On the Your 2020 Income Summary screen, scroll down to the bottom and select Done with Personal Income.
  18. Select Continue until you reach the Here’s A Picture of Your 2020 Income screen. Then select Continue.
  19. On the Your 2020 Deductions and Credits screen, select the Federal Review tab at the top.
  20. On the We’re Ready to Review Your Federal Return screen, select Yes, I’ve entered everything and let’s review, and then Continue.
  21. Select Continue until you reach the Ready for Federal Review screen. Then Continue.
  22. Review any final warnings and fix any errors. If you make any changes at this stage, be sure to run Smart Check again, until there are no new warnings to fix. Then select Done.
  23. On the Check This Entry, Explanation of Changes screen, enter TO CORRECT SCHEDULE D CAPITAL LOSS AMOUNTS, and then Continue.
  24. On the Let’s work on your state return screen, select Continue and then Edit by your state return. Follow the instructions to amend your state return. No additional info will need to be included.
  25. On the Your Amended Return Summary screen, you may see a warning that TurboTax doesn't detect any differences between your original 2020 return and your amended return. Note: The change may not impact your current tax liability; however, your capital loss carry forward has been recalculated and an amended return needs to be filed to report the corrected amount to 2021.
  26. Save the amended return(s) for your records.
  27. Follow the TurboTax instructions to e-file and/or mail the amended return(s).

We’re here to help if you have questions or need assistance. You can call (866) 278-9691 to reach a tax expert who is prepared to assist you with this issue. Tell the expert you’re calling about: 2020 Capital Loss Carryover.

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