How does the Capital loss carryover work for IRS Form 1040 schedule D?
I'm a little unclear on how this works. from 2007, I had a professional do my taxes. here's what I have in by schedule D. Box 1F: (1,119) Box 7: (1,119) Box 8f: (3,836) Box 14 (6,254) Box 15 (10,090) Box 16 (11,209) Box 21 (3,000) I only had short term losses for 2008. They were (843). With this information, how do I fill out my schedule D? What carries over from 2007 for short and long term? I did the worksheet for capital loss carry over and line 41 on my 07 1040 is (-8,337). I came up with (12,052) for my final number. This doesn't seem right. Note that all ()'s mean negative.
Public Comments
- I understand the following: (1) You had a short term capital loss in 2007 of $1,119 (2) You had a long-term capital loss in 2007 of $3,836 (3) You had a long-term capital loss carryforward from 2006 into 2007 of $6,254. (4) Therefore your total available long term capital loss in 2007 was $10,090 (= $3,836 + $6,254) (5) Your 2007 line 41 (income after deductions) was negative $8,337. Since the worksheet seems to be leading you astray, let's try logic. Your income after deductions was sufficiently negative ($8,337), that even without taking the allowed capital loss of $3,000, you would have owed no tax in 2007. (Without the $3,000 capital loss your income after deductions would have been negative $5,337 (= $8,337 - $3,000). So you did not use up any of the capital losses in 2007 to reduce your tax. Therefore you are allowed to carry over your entire capital losses from 2007 to 2008 -- short term as short term and long term as long term. Thus, your short term capital loss carryforward from 2007 to 2008 would be $1,119 and your long-term capital loss carryforward from 2007 to 2008 would be $10,090. Richard K Master Tax Advisor This advice was based upon my understanding of the tax law in effect at the time it was written as it applies to the facts provided by you. See my profile for more information.
