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In 2015 I incurred a 10k capital loss. I haven't made much in capital gains from that year since so I haven't declared the losses on my 1040 in 2015 or any year since (I have a 1099 from 2015 to prove the loss) as I thought that I would wait until I'd need it. I might need to sell some stocks soon. How to record the losses of 2015 vs. any gains from any stocks that I would sell this year (2022)?

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  • Are you saying that there is nothing on the 2015-2020 tax forms saying you were carrying over losses?
    – mhoran_psprep
    Jan 30, 2022 at 12:39

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When you had a loss in 2015 it was recognized in 2015 and reportable on your 2015 tax return. It's not a "get out of jail" card you get to keep in your pocket.

2015 is a closed year and you can no longer amend that return. That is, you can amend it, but it won't change anything since any refund stemming from this additional loss wouldn't be paid to you due to the statute of limitations expiring. Since it's 10K and you probably had taxable income in all the years since then, it is unlikely that you can carry it forward to any year still open.

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  • Well this is embarrassing, I just pulled up my pdf of my 2015 1040, I actually did put the loss on schedule D. I reported $3020 short term capital losses and $7223. (lines 7 and lines 15) How would I report in my 1040 for tax year 2021 so the IRS knows that I am trying to cancel out my capital gains in 2021 vs. the losses in 2015 and, how to do this in parallel with the capital losses in 2021?
    – user1422331
    Jan 31, 2022 at 16:43
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    @curiousasker you wouldn't. You would look for capital losses carryover spreadsheet on your 2020 return for that.
    – littleadv
    Jan 31, 2022 at 16:59
  • So if I didn't know to put in a carryover spreadsheet since 2015 tax year 1040 schedule D, is there anything I can do?
    – user1422331
    Feb 1, 2022 at 7:53
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    @curiousasker that's right. You can try and amend it now and put it there, but unless you had less than $10K taxable income in all of these years it was wasted already so probably no point.
    – littleadv
    Feb 2, 2022 at 3:36
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The capital loss carryforward only goes one year at a time. If you didn't use it against any gains, and $3k of ordinary income, in 2016 and 2017 for sure and maybe 2018 and 2019 depending on the specific numbers, you wasted it. There is no option to choose when to use it, except by choosing when you sell holdings and thereby realize gains that the loss can offset. (If you still like the investment you can sell at a reportable gain and re-buy; the much-complained-about 'wash sale' rule only defers a loss on something you re-buy within 30 days.)

You could amend the back years and if there are resulting refunds for 2018 or maybe 2019 those are still within statute -- but the former only until April 18, and getting 3 years processed in 2.5 months is iffy -- especially since I think you still have to amend before 2019 on paper, which is backlogged. But unless you use a paid preparer, you'll probably have to do them by hand, because I don't think you can still get retail software that far back.

Worst case, if you can't get 16-18 sequenced in the time available, roll the dice and file them without waiting. Quite a while ago I was in a similar situation of needing to amend several interdependent years near the refund deadline, so I filed them all on the theory I had nothing to lose by trying. As expected, processing got them out of order and flagged all but the first because they didn't match the unamended values on file, but they allowed me to appeal, and Appeals ultimately resolved it and gave me the refunds -- two and a half years later.

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    And you'll need 2015, 2016 and 2017 processed first, before you even get to 2018....The IRS may reject them all as out of statute.
    – littleadv
    Feb 2, 2022 at 3:37
  • @littleadv: OP says they already filed 15 correctly. IRS will deny the refunds on 16 and 17, but will process the amendments, so that 18 and 19 can work if the carryforward reaches them (I said 'maybe') and they're filed on time (I said 3 years is 'iffy'). But added a note about that.
    – dave_thompson_085
    Feb 4, 2022 at 1:56

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