Capital Loss Carryover Calculation Question - 2024 Tax Software Issue

Does it matter if the gains in 2023 were short-term vs long-term? Would that change how the carryover is calculated? Also, what if the original losses in 2022 were a mix of short and long term?

Great questions! The character of the gains and losses (short vs long-term) does affect how they offset each other, but shouldn't change the total carryover amount. Short-term losses first offset short-term gains, and long-term losses first offset long-term gains. If there's an excess in one category, it can offset the other category. So if your 2022 losses were mixed, the software should be tracking both types separately and applying them correctly to your 2023 gains. Regardless of the character of the gains and losses, you should still end up with a $4,000 carryover to 2024 based on the numbers you provided. This could be used to offset future capital gains or up to $3,000 of ordinary income per year until exhausted.

Wait, does this tool actually check for errors in returns from previous years too? I've been using TurboTax and I'm concerned it might have messed up my loss carryover from 2021-2022. Does it work with tax software output or do you need to upload the actual forms?

I'm suspicious of any service claiming to do better than established tax software. How exactly does it "spot errors" when the big companies have entire teams dedicated to getting these calculations right? Is this just another subscription trap?

Yes, it absolutely works with previous years' returns! You can upload your completed tax forms (like your 1040 and Schedule D) from multiple years, and it will analyze the treatment of capital losses across tax years to make sure the carryover was handled correctly. It works with forms from any tax software. Regarding skepticism, I felt the same way initially. The difference is that taxr.ai focuses specifically on document analysis rather than tax preparation. It's not replacing your tax software - it's verifying its work. The big tax software companies focus on covering every possible scenario, but that doesn't mean they're error-free, especially with complex multi-year calculations like loss carryovers.

How does this actually work? I thought it was impossible to get through to the IRS these days. Is there some special number they call or do they just keep redialing until someone answers?

Sorry but this sounds like bs. Nobody can magically get through to the IRS faster. And even if you did speak to someone, they're notoriously unhelpful and won't give specific tax advice about software issues. This sounds like a waste of money.

It works by using their system that continuously navigates the IRS phone menus and holds your place in line. They don't have a special number - they call the same IRS hotlines we all use, but their system handles all the waiting and menu navigation automatically. Once an actual human IRS agent answers, they conference you in. Regarding whether IRS agents are helpful, my experience was actually quite positive. I didn't ask for "tax advice" but for clarification on how capital loss carryovers should be calculated according to IRS rules. The agent confirmed the correct methodology and explained which form (Schedule D and its worksheets) would show the correct carryover amount. This information was enough for me to identify and fix the problem in my software.

Thanks for the tip! I just looked at the actual Schedule D form in the PDF and you're right - there's a discrepancy. The main software screen shows $0 carryover, but Schedule D Line 16 is showing the $4,000 remaining loss amount. So it looks like the calculation is correct in the actual forms but just displaying wrong in the summary screen? Do you think I should contact the software company about this display issue or just ignore it since the actual form seems correct?

If the actual Schedule D shows the correct $4,000 carryover amount, then your tax return is being filed correctly and you should be fine. This is definitely just a display issue in the software interface. It's still worth reporting to the software company since others might be confused by the same issue. Take screenshots of both the incorrect summary page and the correct Schedule D to include with your report. But as far as your taxes are concerned, you're good to go - the IRS receives the actual forms, not the software's summary screens.

This is good advice. Numbers get fuzzy when we rely on memory. I've messed up carryovers before because I was working from memory instead of having my previous return open while doing my current taxes.