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Old 02-23-2012, 03:22 PM   #21
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Originally Posted by GrayHare View Post
Thanks for the posts, but so far none of the regs/forms quoted say a carryover MUST be used against gains of the next year. They do state we CAN use them, and also state we CAN carryover unused losses to future years. Since there is no requirement of use, into the forms we enter the amount of loss carryover we are ELECTING to use that year. Any remainder can be carried forward indefinitely.

If there is an IRS reg that says a loss carryover MUST be used against gains in a year, then I've missed it and welcome a quote/reference.
God... it is plain english.... but here you go... section 1212(b)

(b) Other taxpayers
(1) In general If a taxpayer other than a corporation has a net capital loss for any taxable year—
(A)the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and
(B)the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.



Succeeding taxable year is the NEXT year... If you choose to not use them in the next year, you lose them... simple as that...
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Old 02-23-2012, 05:25 PM   #22
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Originally Posted by GrayHare View Post
If I have a 2011 capital loss to carryover to 2012, I plan to not use it to offset gains in tax year 2012, but rather save it for 2013 when offsetting gains may be more valuable. AFAIK, there is no rule that says a capital loss carryover MUST be used against gains in the immediately following year.
I can't give you a reference now but I'd bet a fair amount against this...........
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Old 02-23-2012, 05:30 PM   #23
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If there is an IRS reg that says a loss carryover MUST be used against gains in a year, then I've missed it and welcome a quote/reference.
You asked, and got answers to your questions. You challenged, and got more answers, with references to forms and such. Why argue? Just go ahead and do it the way you want.

Work taught me that if you don't want the answer you don't ask the question.
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Old 02-23-2012, 05:45 PM   #24
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I don't think you are required to carry over losses. But Topic 409 is pretty clear that if you choose to use carried over losses to offset gains, they are required to be losses carried over from the previous year. The loss carried from this year to next year is calculated based on this year's return. If you do not apply last year's loss carry over to this year's return, then you will not be able to carry it to next year, and the loss will be... uh... lost, pun intended.

But I am not a tax professional, so under no circumstances should anyone consider this tax advice.

Tax Topics - Topic 409 Capital Gains and Losses

"Capital gains and deductible capital losses are reported on Form 1040, Schedule D (PDF). If you have a net capital gain, that gain may be taxed at a lower tax rate than your ordinary income tax rates. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than the sum of your net short-term capital loss and any long-term capital loss carried over from the previous year. Generally, net capital gain is taxed at rates no higher than 15%. However, for the years 2008 through 2012, some or all net capital gain may be taxed at 0%, if it would otherwise be taxed at lower rates."
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Old 02-23-2012, 05:51 PM   #25
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from pub 550

Capital loss carryover. If you have a total net loss on line 16 of Schedule D that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. If part of the loss is still unused, you can carry it over to later years until it is completely used up.

When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year.
************************************************** *********

Sounds like you are correct that you can refuse to take the current year allowable loss but the carryover to next yr gets affected whether you use it or not. Kind of like depreciation on a rental. You don't have to take it but the IRS will depreciate it anyway for you so your basis will go lower whether you claim the loss or not.
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