If you sold stock or mutual funds at a loss, you can use the loss to offset any capital gains you had from similar sales. If the net amount of all your gains and losses is a loss, you can report the loss on your tax return.
You can report current year net losses up to $3,000 ($1,500 if you’re married and filing a separate return). Any net losses over $3,000 are carried forward to next year’s return. Capital losses may be carried forward indefinitely.
Calculate your allowable capital loss on Schedule D and enter it on Form 1040, line 13.
Any unused prior-year loss will be netted against this year’s capital gains. If you have a loss, then the amount of the loss up to $3,000 ($1,500 if you’re married and filing a separate return) is reported on your tax return and is deducted from income.
If you’re carrying over losses to next year, the H&R Block software stores that information and then imports it into next year’s return. If you’re not importing a return from last year, you can find the carryover amount on last year’s Schedule D: Capital Loss Carryover Worksheet.