Question

Capital Gains Losses Carry Forward from 2022

Forum|Forum|3 years ago
January 2, 2023
1 reply
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Hi! If I have say $250k losses incurred this year after all capital gains and losses calculated. This $250k should carry over to next year 2023. Should I be able to deduct first, long term gains then short term gains? Then anything else up to $3,000 for ordinary income? Please confirm.

M

Mike9241

if you have both net short and net long-term capital losses. short-term gets used first. you do not have any say in the matter. if you have other net income. up to $3K will be deducted. This reduces the carryforward to 2023.

T

techie353Author

@Mike9241

Can you clarify once again... short term gets used first then long term, correct? Last is if you have net income (up to 3k). Did I understand accurately?

M

Mike9241

Can you clarify once again... short term gets used first then long-term, correct? yes.

up to $3,000 of capital losses can be used to offset other income. figure taxable income without the capital loss. if it's more than $3,000 then $3,000 of capital losses will be used. if taxable income is less than $3,000. then the lesser amount will be used. page 1 of the 1040 will always show the $3,000 loss, (the IRS rules not Turbotax) but Turbotax will correctly compute the actual carryover.