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.
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.
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??
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:
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?