Long-Term Capital Loss

[PointBreeze]

I searched the archives, and I'm still not 100% sure about this.

My DP has a $3,365 LTCG and a $16,451 LTCL. That nets to a $13,086 LTCL.

So she would pay no capital gains tax for 2024 and has $13,086 net loss to carry over.

My question: is she able to offset 2024 regular income by $3,000, or does that not start until 2025 income and the following years?

 

[rk911]

She should be able to use $3K of the loss in the same tax year.

 

[NanoSour]

They have to be actual "realized" gains and losses before they can be listed on the tax return as such.

 

[PointBreeze]

They have to be actual "realized" gains and losses before they can be listed on the tax return as such.

Thanks, they are realized.

 

[audreyh1]

She should be able to use $3K of the loss in the same tax year.

then the remaining capital loss is carried over into the following year and can be used against any capital gains if still not used up, again up to $3K against ordinary income. Any remaining loss carries over again.

 

[Out-to-Lunch]

I believe that she is required to use $3k this year. That is, you don't have the option of deferring your $3k offset.

 

[PointBreeze]

Thank you audreyh1 and Out-to-Lunch! Just the info I needed.

 

[jebmke]

I believe that she is required to use $3k this year. That is, you don't have the option of deferring your $3k offset.

Correct

 

[audreyh1]

Thank you audreyh1 and Out-to-Lunch! Just the info I needed.

Make sure your tax software handles any carryover to following years or track it yourself and don’t forget to enter it.