For any year (including the final year) in which capital losses exceed capital gains, the estate or trust may have a capital loss carry-over. A capital loss carry-over may be carried forward indefinitely. Capital losses keep their character as either short-term or long-term when carried over to the following year.
If your capital losses exceed your capital gains, the amount of the excess loss that can be claimed is the lessor of $3,000, ($1,500 if you are married filing separately) or your total net loss as shown on line 16 of the 1040 Schedule D, Capital Gains and Loses. If your net capital loss is more than this limit, you can carry the loss forward to later years.
Use the Capital Loss Carryover Worksheet in Publication 550, to figure the amount carried forward. If you are using our site to complete your return, we automatically calculate your carryover.
TO ENTER IT ON THE SITE:
Capital Carryover is found under the INCOME tab, go to the section Capital Gains or Losses (show more), Capital Loss Carry-over Short & Long-Term