3

Is it mandatory to specify a capital loss value on line 21 of Schedule D? We are married filling joint return; we have capital loss over $3000 but our income is very low and we don't have to pay taxes. Can we choose to specify 0 on line 21 of Schedule D and line 13 of form 1040 so we can carryforward the entire capital loss?

3

You are not allowed to pick and choose what years to take a loss once the stock/fund is sold.

While I realize it might be too late for you to do anything now, in the future if members should read this, they might consider doing a Roth conversion during that year they will have $3000 in losses. This way they will show some income that can be offset by that loss, effectively getting a free conversion to the Roth.

  • I answered the title question. But you are correct my answer appeared ambiguous. Edited. Thx – JoeTaxpayer Mar 26 '17 at 14:33
1

On line 21 of Schedule D, you write the smaller of

  • Line 16 (Net Short-Term Capital Gains/Losses plus Net Long-Term Capital Gains/Losses including any Capital Loss carryovers from previous years) if Line 16 is a loss
  • 3000

So, in your case, since your Line 16 shows a loss of more than $3000 on Line 21, you write 3000 on Line 21 (the parentheses indicating that is it a negative number are already included on the form). Also, you write (3000) on Form 1040 Line 13. The rest of the loss is a carryover to next year (be sure to fill out the Capital Loss Carryover Worksheet where the carryover to next year is computed).

Summary: you cannot write 0 on Line 21 of Schedule D and carry over the entire loss to next year. You must deduct $3000 this year and carry over the rest of the loss to next year.

You must log in to answer this question.

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