Capital Loss Carryover Calculator
Enter the prior-year Form 1040 taxable income and Schedule D lines 21, 7, and 15. The calculator follows the IRS Capital Loss Carryover Worksheet and separates the amount that goes to next year's Schedule D line 6 from the amount that goes to line 14.
Total capital loss carryover$2,000.00
- Short-term capital loss carryover
- $2,000.00
- Long-term capital loss carryover
- $0.00
- Prior-year net loss not carried forward
- $3,000.00
- Next-year Schedule D entries
- Line 6: $2,000 short-term loss carryover
Capital Loss Carryover Worksheet
| Worksheet line | Amount |
|---|---|
| 1. Taxable income | $50,000.00 |
| 2. Capital-loss deduction | $3,000.00 |
| 3. Income plus deduction, floored at zero | $53,000.00 |
| 4. Loss used against income | $3,000.00 |
| 5. Short-term capital loss | $10,000.00 |
| 6. Long-term capital gain | $5,000.00 |
| 7. Short-term loss absorbed | $8,000.00 |
| 8. Short-term carryover | $2,000.00 |
| 9. Long-term capital loss | $0.00 |
| 10. Short-term capital gain | $0.00 |
| 11. Deduction not used by short-term loss | $0.00 |
| 12. Long-term loss absorbed | $0.00 |
| 13. Long-term carryover | $0.00 |
Assumes the Form 1040 taxable income and Schedule D amounts all come from the same prior-year individual federal return.
Carryovers keep their short-term or long-term character for next year.
How to use this calculator
- Enter prior-year Form 1040 line 15 as taxable income, using the negative worksheet amount if line 15 was limited to zero.
- Enter prior-year Schedule D line 21 as a negative number or zero.
- Enter the signed short-term result from prior-year Schedule D line 7.
- Enter the signed long-term result from prior-year Schedule D line 15.
- Review the short-term and long-term carryovers before entering them on next year's Schedule D.
How the carryover is calculated
The IRS Capital Loss Carryover Worksheet starts with the prior-year return, not with each sale. This calculator uses Form 1040 taxable income and three Schedule D lines from the same prior-year return. It then determines how much of the old capital loss was used and how much remains short-term or long-term for the following year.
Let T be prior-year taxable income, D21 be Schedule D line 21, S be Schedule D line 7, and L be Schedule D line 15. Losses are entered as negative numbers. The worksheet is:
W1 = T
W2 = max(0, -D21)
W3 = max(0, W1 + W2)
W4 = min(W2, W3)
W5 = max(0, -S)
W6 = max(0, L)
W7 = W4 + W6
short-term carryover = max(0, W5 - W7)
W9 = max(0, -L)
W10 = max(0, S)
W11 = max(0, W4 - W5)
W12 = W10 + W11
long-term carryover = max(0, W9 - W12)
The total carryover is the short-term amount plus the long-term amount. The calculator also compares that total with the prior-year net capital loss, max(0, -(S + L)), to show any prior-year net loss that is not carried forward under these entries.
What moves the answer most
The biggest drivers are the character of the loss and the amount of the capital-loss deduction already used. A short-term loss is reduced first by the capital-loss deduction used against other income and by any long-term capital gain. A long-term loss is reduced by short-term capital gain and by any remaining capital-loss deduction not already absorbed by the short-term loss.
Taxable income matters when Form 1040 line 15 was zero. The worksheet asks for the amount that would have been taxable income before the zero floor, so a negative number can reduce or eliminate the capital-loss deduction treated as used for carryover purposes.
What this calculator leaves out
This calculator does not prepare Schedule D, Form 8949, or Form 1040, and it does not decide whether the source lines were prepared correctly. It does not cover state carryover rules, estates, trusts, corporations, nonresident returns, canceled debt exclusions, or the allocation required when spouses file separately after filing jointly. Check the Schedule D instructions for the tax year you are filing before putting the carryover on next year's return.
Worked example
Suppose prior-year taxable income was $50,000, Schedule D line 21 was -$3,000, Schedule D line 7 was -$10,000, and Schedule D line 15 was $5,000. The capital-loss deduction is $3,000, taxable income plus that deduction is $53,000, and worksheet line 4 is $3,000.
The short-term loss is $10,000 and the long-term gain is $5,000, so $8,000 of the short-term loss is absorbed. The short-term carryover is $2,000. There is no long-term loss, so the long-term carryover is $0. The total capital loss carryover is $2,000, entered on next year's Schedule D line 6.
Common questions
How do I calculate a capital loss carryover?
Use the Capital Loss Carryover Worksheet in the Schedule D instructions for the year after the loss year. You need prior-year Form 1040 taxable income, Schedule D line 21, Schedule D line 7, and Schedule D line 15. The worksheet determines how much loss was used and carries the unused short-term and long-term portions separately.
Does a carryover remain short-term or long-term?
Yes. A short-term capital loss carryover remains short-term, and a long-term capital loss carryover remains long-term. The next-year Schedule D uses those character buckets because they can affect how gains and losses offset each other.
Where do carryovers go on Schedule D?
A short-term capital loss carryover from the worksheet goes on next year's Schedule D line 6. A long-term capital loss carryover goes on next year's Schedule D line 14. If either amount is zero, there is no entry for that line from this worksheet.
Can a capital loss carryover offset all capital gains?
A capital loss carryover can offset capital gains in the next year without the ordinary-income deduction limit applying to that offset. If losses still exceed gains, the annual capital-loss deduction limit can apply again, with another carryover possible after the next worksheet is completed.
What if Form 1040 taxable income is zero?
The Schedule D worksheet may require the taxable income amount that would have existed before Form 1040 line 15 was limited to zero. That amount can be negative. Entering that negative number helps the worksheet avoid treating a capital-loss deduction as used when it did not actually reduce taxable income.
Do capital loss carryovers expire?
For individual federal income tax purposes, unused capital losses generally carry forward until they are used. The amount must still be recomputed each year because gains, losses, taxable income, and the annual deduction can change the short-term and long-term pieces.