May I elect to NOT apply a capital loss carryover to my capital gains and still apply $3,000 of the carryover to my ordinary income?

Forum|Forum|1 year ago
November 24, 2024
1 reply
0 views

I had a very large capital loss last year that has been carried forward to this year. This year, I would like to apply $3,000 of the carryover loss to my ordinary income, but preserve the remainder of the carryover to use in future years, even though I do have capital gains this year. I would prefer to pay the current tax rates on this year's gains and retain the balance of the carryover until a future year when I will be in a higher tax bracket and the offset will be more beneficial to me.

Can I do this, or do I have to apply last year's capital loss to this year's capital gains in order to get the benefit of the $3,000 offset to my ordinary income?

Not A Product Question

Best answer by rjs

There are no options for how a capital loss carryover is applied. You have to enter the full amount of the carryover, and TurboTax will apply it as required by the tax law. It will be applied first to your capital gains. If that does not use the entire loss, up to $3,000 will be applied against ordinary income, and any remaining loss will be carried over to the following year. That's the only way it can be done. You have no choices.

VolvoGirl

Employee

Sorry you have to apply the whole Capital Loss Carryover to your current gains. Then if you still have a loss you can deduct 3,000 against your other income.

But If you have a negative AGI or negative taxable income a loss will show up on 1040 BUT it won't reduce the carryover to the next year.

UncleBobsNieceAuthor

That was my fear. To clarify, my carryover loss is more than $3,000 greater than my capital gains this year, so I will be carrying over losses for several more years. I was just hoping I could keep applying the carryover loss in $3,000 installments against my ordinary income, without applying any of it to my capital gains. Thanks for your quick response.