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Capital loss carryovers


JanMi

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I have a client that had a capital loss carryover from her 2009 return for $8,423.00. This year she had no Sch D stock transactions to report.

Do I still enter the carryover amount to the carryover worksheet and she claims the ($3000.00) loss? Or do I not report any of the carryover

until she has stock transactions? Will she lose the carryover if she doesn't use it? Thank you.

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>> Will she lose the carryover if she doesn't use it?<<

The carryover must be reported on the Sch-D each year until it is used up. Any amount that is not used on the current year will carry forward to future years. There is no option to use or not use in a current year, the tax return is simply not correct if it is not reported on Sch-D.

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>> Will she lose the carryover if she doesn't use it?<<

The carryover must be reported on the Sch-D each year until it is used up. Any amount that is not used on the current year will carry forward to future years. There is no option to use or not use in a current year, the tax return is simply not correct if it is not reported on Sch-D.

I entered the carryover amount into my program and it gave her the ($3000) against her income for the year. But it doesn't seem right to deduct the $3000

from her income when she doesn't have and Sch D transactions to report. Am I looking at this wrong? Thanks.

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Yes, you are looking at it wrong. If she had any capital gains, you would net ALL of her carryover against her gains up to the amount of her gain. Then if she still had excess carryover, you would use up to $3,000 against her other types of income.

In your case, you are netting her carryover against her capital gains, but that is $0. Then you use up to $3,000 against other types of income, showing ($3,000) on her return.

You cannot use MORE THAN $3,000 against other types of income.

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I entered the carryover amount into my program and it gave her the ($3000) against her income for the year. But it doesn't seem right to deduct the $3000

from her income when she doesn't have and Sch D transactions to report. Am I looking at this wrong? Thanks.

It might be a good idea to read about capital losses for future reference.

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