Capital Loss Carryover - Does it expire? How much can be used per year?

Forum|Forum|3 years ago
May 27, 2022
2 replies
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Just curious if short or long term capital losses ever expire? I don't think they do - you can use them until they're extinguished, right? And also, either type of loss (long or short term) can be used to offset either type of gain in a calendar year, correct? Lastly, is there a maximum of the capital loss that can be used per year (I think you can use as much as possible *up until* a net 3,000 loss for the year, yes?)

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Anonymous_

Employee

Yes, your statements are all essentially correct.

See https://www.irs.gov/taxtopics/tc409

rjs

Employee

To be a bit picky, your use of the terms "can use" and "can be used" is not quite correct. Saying it that way makes it sound like it's an option. But you have no choice about how the capital loss carryover is used each year. The calculations must be done according to the tax law. The capital loss carryover will be used every year as you have outlined, even if you would prefer not to use it in a particular year.

One other point. It's not quite true that the capital loss carryover does not expire. It expires when you do (that is, when you die). Any remaining capital loss carryover that is not used on your final tax return is forfeited.