Foreign Exchange loss realized in 2023 can be carried over for multiple years?

Forum|Forum|2 years ago
January 3, 2024
2 replies
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In 2023, I realized the loss of FX about $30,000. I don't have capital gain. In that case, I can deduct up to $3,000 as a minus income in 2023, right?

To carryover the remainder of the loss ($27,000) to the 2024, and later years, how I do in Turbotax?

TurboTax Deluxe Online

Best answer by Mike9241

don't have enough information so I would suggest you go one one on one with a tax professional. These might be Sec 988 transactions that would make the loss, at least in part, ordinary and therefore not subject to the $3,000 limit for capital losses.

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@Mike9241

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_Aw_3_1Author

Thanks. I found TaxAct website stating that FX trading loss is under section 988 unless I chose to opt out. Because I have not opted out, sec 988 seems apply, not Sec 1256, and with sec 988 no $3,000 limit as you noted.

One thing I need to confirm with pro is if I can use sec 988 as the FX company I am using is not U.S. based.

With this basic understanding, I am more comfortable with paying a service fee to pro as 24% of $30,000 is $7,200, which is a quite saving.