Visitor II

Capital Loss Carryover

I understand that I must use $3,000 of a Capital Loss Carryover each year, whether or not I claim it.  My question is if I have a capital gain on my return this year, must I use the Capital Loss Carryover to offset that entire gain + an extra $3,000.  This is how it is being calculated through TurboTax.  Or can I take ONLY $3,000, leaving me still having a capital gain for the year?  I have very low income so I am better off if I only use the 'current year's allowable deduction' of $3,000 and save the rest for the following year.

5 Comments
TurboTax Specialist

Capital Loss Carryover

Yes, you are correct. Any capital loss carried over to the current tax year is used first to offset any capital gains in the current year. If your capital gain is less than your carryover amount, you would first claim up to $3,000 of additional capital loss, from the amount carried over, then carry any remaining loss into the future.

 

The IRS requires you to claim the carryover loss each year until it is used up.

Visitor II

Capital Loss Carryover

So, I AM REQUIRED to use the Capital Loss Carryover for both offsetting the gain and an additional $3,000?  So for me that is a total of using ~$5,500 of my carry over.  I would prefer to only use $3,000 of it and continue to carry forward the extra $2,500 and add that amount to my taxable income.  Not possible??

TurboTax Specialist

Capital Loss Carryover

Unfortunately, you don't have the option to choose how much carry over you use. The result you see in TurboTax is correct, according to IRS tax rules.

Visitor II

Capital Loss Carryover

My capital loss carryover has not been added to this years forms. Can I override and add it?

TurboTax Specialist

Capital Loss Carryover

Yes, if you didn't transfer last year's TurboTax return over the capital loss carryover information won't be there so you'll need to enter it yourself. 

 

To enter a capital loss carryover:

 

  • Continue your return in TurboTax Online. (If your return isn't open, you'll need to sign in and click Take me to my return. Make sure you are in the Federal and not the state section.)
  • Click the drop-down arrow next to Tax Tools (lower left side of your screen).
  • Select Tools.
  • In the pop-up window, select Topic Search.
  • In the I'm looking for: box, type capital loss.
  • In the results box, scroll down and highlight capital loss car, then click GO.
  • Follow the onscreen instructions. 

Note: If using the TurboTax CD/Download (desktop) software, you'll need to search for the topic and use the "Jump to" link (instead of using "Tax Tools").

 

 

For more information, please see this FAQ: What is a capital loss carryover?