Discussion:Capital Loss Carryover Complication

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Discussion Forum Index --> Advanced Tax Questions --> Capital Loss Carryover Complication


Discussion Forum Index --> Tax Questions --> Capital Loss Carryover Complication

Taxaddict1 (talk|edits) said:

10 April 2014
Taxpayer had capital loss to be carried over in 2011. Then he did not file a tax return in 2012 because he was not required to. Now he has to file a 2013 tax return. If he wants to carry the loss from 2011 to use in the 2013 tax return, does he have to file back the 2012 tax return?

Nilodop (talk|edits) said:

10 April 2014
Not if you are sure that the carryover to 2013 is unaffected by anything that happened in 2012. But it seems like a good idea to file 2012 anyway, just to avoid IRS questions. I think this has been the subject of several posts here.

Ckenefick (talk|edits) said:

10 April 2014
Several posts...you need to carry forward, to 2013, what would have been carried forward to 2013 had a 2012 return been filed...

Taxaddict1 (talk|edits) said:

10 April 2014
Thank you!

STG (talk|edits) said:

10 April 2014
Stupid question, that I could probably figure out myself, but it seems germaine and people might want to know. Does the $3000 deduction for 2012 have to be taken even though not required to file? Does it matter if they had income?

To put it bluntly - does his carryover for 2013 go down by $3000 for 2012 or not?

Ckenefick (talk|edits) said:

10 April 2014
It doesn't go down if there's nothing there to absorb it.

STG (talk|edits) said:

10 April 2014
I know Kevin will hate this, but for experiment I did a fake 2012 with a $10000 capitol loss carryover from 2011, a $500 capital gain, and no other income. Carryover to 2013 was $9500.

STG (talk|edits) said:

10 April 2014
With $1000 of income still $9500

STG (talk|edits) said:

10 April 2014
Once income goes above standard deduction, starts to offset capitol loss carryover, even when still below filing threshold. Not sure if I trust my software though.

Ckenefick (talk|edits) said:

10 April 2014
I know Kevin will hate this, but for experiment I did a fake 2012 with a $10000 capitol loss carryover from 2011, a $500 capital gain, and no other income. Carryover to 2013 was $9500.

That's right...any intervening capital gain will knock it down, dollar for dollar.

Trillium (talk|edits) said:

10 April 2014
Discussion:Capital loss carryover (is filing req'd?) is right on point for STG's hypothetical. The other sections are good, too - the debate from 2013 is interesting, as they generally are!

More discussions like this: Category:Carryovers.

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