1

I had capital losses from 2014, 2015, and 2016, but here it is 2020 and I haven't claimed any capital gains or losses on my US tax returns since then. Is there anything I can do to get a benefit from this now?

I had about 80, 30, 30 loss for each of those years and I had no gains. I wanted to just save the capital losses for when I did have some gains (I had no gains until 2020 this year). The gains in 2020 are about 20k. Can I avoid claiming the 3000 against income and just carry forward everything year after year?

I was doing some research and I saw that "You can amend a return at any time, but you can generally only claim a refund for up to 3 years from the date the return was due or 2 years from the date the tax was paid. "

Doing a little more research I see "The tax law says you have to use a capital loss before you're allowed to use a personal exemption." Does this mean I would be able to amend a return from 2014, 2015, 2016, even though the deadline is past to receive a refund for those years in order to update the carry forward after reducing it by 3000 in each of those years?

Improve this question
3
  • 2
    There’s not enough information to answer you. You should have taken losses against any gains. If no gains, then $3000 of loss against ordinary income. What happened in 2017, 18, 19? Did you not take the appropriate loss each year?
    – JTP - Apologise to Monica ♦
    Jul 18, 2020 at 2:08
  • Concur with JTP; if you didn't do this correctly, you are now within the 3-year window to amend 2017, 2018, and 2019 returns. To avoid errors, wait for each one to process before doing the next -- once, long ago, I didn't and got stuck in Appeals for two years.
    – dave_thompson_085
    Jul 19, 2020 at 7:39
  • Got it. Welcome to Money.SE, note that comments often get long/many and deleted easily. I edited your comments into the question. You are welcome to re-edit if you wish.
    – JTP - Apologise to Monica ♦
    Jul 19, 2020 at 13:11

1 Answer 1

Reset to default
4

I'd use Dave's comment/advice. Starting with 2014, create the amended return. Do it right, if there were no gains, $3000 of the loss goes against ordinary income. The rest gets carried forward. Send it in, and they'll send a response that you are too late for that refund. Then file 2015 using the same process. You'll lose $3000 of loss for each year that's 2018 or prior. $15K out of the $140K is unfortunate, but not tragic.

Improve this answer
6
  • I'm not from the US, so I've no idea who is right (or, whether I'm misinterpreting something), but Dave's comment says to start with amending the 2017 return (with, to me, the implication that the three-year rule prevents going further back). Or is it that you can amend that far back (without getting any refund) and this is necessary to "establish a connection" (if that's the right phrase) between the years the losses were made and the years (2017 onwards) when amend-and-refund is possible?
    – TripeHound
    Jul 19, 2020 at 21:35
  • Ah, I see. Well, one can’t ignore the missed years, $3000/yr that ‘should’ have been taken is lost. That, I’m certain of. If one starts with the return that can still get a refund, the IRS might still ask for the paper trail.
    – JTP - Apologise to Monica ♦
    Jul 19, 2020 at 22:51
  • Do you actually have to take the $3000 in loss against regular income?
    – Loren Pechtel
    Aug 19, 2020 at 4:05
  • @TripeHound+ I read "I haven't claimed any capital gains or losses since then" to mean since 2016, implying the losses in 2014-2016 were claimed (up to the $3k limit). The paragraph implying 2014-2016 need amending was added in an edit after my comment. If so, I concur OP needs to correct those first (but is too late to get any refunds) and then 2017-2019 (by next April is in time to get any refunds).
    – dave_thompson_085
    Aug 19, 2020 at 9:43
  • @dave_thompson_085 You could be right; I read "even though the deadline is past to receive a refund for those years" (2014-16) as meaning OP hadn't claimed for those years (and accepts it's too late to do so) but wants to "rescue" the loss.
    – TripeHound
    Aug 19, 2020 at 10:13

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .