If capital loss is not needed does it have to be claimed?

Forum|Forum|1 year ago
February 21, 2025
3 replies
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Best answer by VolvoGirl

Yes. You can still reduce your income by 3,000 each year. You have to report the carryover every year until it's used up. You can't skip a year. Even if you don't report it on your return you have to reduce it by the 3,000 (1,500 MFS) when you carry it over to next year. You can't choose when to use it.

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

DoninGA

Employee

If you are referring to a capital loss carryover, then yes it has to be reported on your tax return for every tax year until the loss is used up.

For a capital loss carryover -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Under Investment Income
On Capital Loss Carryover, click the start or update button

Or enter capital loss carryover in the Search box located in the upper right of the program screen. Click on Jump to capital loss carryover

VolvoGirlAnswer

Employee

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

rdr3737Author

You're awesome, thank you!!

MayaD

Yes, it is a taxable event and needs to be reported.

Per IRS:

You must report all 1099-B transactions on Schedule D (Form 1040), Capital Gains and Losses and you may need to use Form 8949, Sales and Other Dispositions of Capital Assets. This is true even if there's no net capital gain subject to tax.

irs.gov

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