Can I offset capital gains from a home sale with carryover losses from stocks in previous years?

Forum|Forum|4 years ago
April 18, 2022
2 replies
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I sold a primary home in 2021 that I have lived in over 2 years at a gain. I also have carryover losses from stock sales. I read that these can be offset but Turbotax doesn't adjust for it. Is it a separate process or am I misunderstanding my eligibility? Thank you.

TurboTax Premier Online

fanfare

Employee

@jw6403

your carryover losses should be used against your profit on your home sale, which is a capital gain.

are you eligible for the Home Sale capital gain exclusion?

then, there is nothing to offset.

Hal_Al

Employee

Q. Am I misunderstanding my eligibility?

A. No, The carry over losses can be applied to the net (after the home sale exclusion) gain on the home.

Q.. Is it a separate process?

A. No. The sale is reported on form 8949 and transfers to line 10 of Schedule D. The Long-term capital loss carryover shows on line 14 of Schedule D. The two are combined and the net gain or loss shows on line 15.

If TurboTax is not picking up your loss form last year's return, you have to enter it manually at:

- Federal Taxes tab (Personal in Home & Business)

- Wages & Income

Scroll down to:

-Investment Income

-Capital Loss carryover

jw6403Author

Hi. Thank you for the confirmation & clear insight. I entered the home sale details through TurboTax but the gains show separate from my carryover losses. So I'm liable for the taxes on the gains while only being eligible to deduct $3000 for the carryover loss. I assumed the gains would be offset. Are you saying it's a manual process? I never had to make any manual corrections in TurboTax. I've used TurboTax for years so not sure why it wouldn't be automatically calculated. Also do I have to file a separate Form 8949 & Schedule D? I appreciate any further assistance you can provide. Thank you.

Hal_Al

Employee

Q. Are you saying it's a manual process?

A. No.

Q. Also do I have to file a separate Form 8949 & Schedule D?

A. No. These forms are generated by TurboTax as part of your tax return filing.

You said " I entered the home sale details through TurboTax but the gains show separate from my carryover losses". Where, on the forms, are these showing? If the home sale is anywhere other than form 8949 and line 10 of Schedule D, you entered it in the wrong place*. TT should automatically place the Long-term capital loss carryover on line 14 of Schedule D, from last year's return.

*In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)

- Wages & Income

Scroll down to:

-Less Common Income

- Sale of Home