Do I need Form 8949 with Schedule D for reporting long-term capital losses from stock sales?

Thanks for the info. Quick follow-up: when filing using tax software (like TurboTax), will it automatically create both forms if I just enter the 1099-B info, or do I need to specifically select Form 8949 somewhere? Also, does the software typically track my loss carryover for next year or should I make note of this somewhere?

Most tax software will automatically generate Form 8949 when you enter your 1099-B information. You typically just need to input the details from your 1099-B, and the software will create both Form 8949 and Schedule D for you. The forms will be included in your complete tax return package. Good tax software will also track your capital loss carryover for you and apply it to next year's return if you use the same software. However, it's always a good idea to keep your own record of the carryover amount and verify it's correct when you prepare next year's taxes. Save a copy of this year's completed return showing the capital loss information for your records.

Does it work with imported data from brokerages? Like if I have my 1099-B from Schwab, can I just upload it or do I have to manually enter all the transactions? My concern is making errors when typing in all those numbers.

I'm a bit skeptical... how does it compare to just using TurboTax or H&R Block? They also handle investment stuff automatically. Is it worth switching to something different if I already pay for one of those services?

You can directly upload your 1099-B PDF from Schwab and the system will automatically extract all the transaction data without you having to manually type anything. It supports documents from all major brokerages, which saved me tons of time compared to manual entry. It works alongside tax software like TurboTax or H&R Block rather than replacing them. I still used TurboTax last year, but I ran my documents through taxr.ai first to understand exactly what I was reporting and why. It caught several issues that TurboTax didn't flag and explained tax concepts in much clearer terms. Think of it as having a tax expert review your investment situation before you finalize everything in your regular tax software.

How does this actually work? I've called the IRS like 5 times about my capital losses and either wait for 2+ hours or get disconnected. Don't they just use the same phone number everyone else uses?

This sounds too good to be true honestly. The IRS is impossible to reach. I've tried calling about my capital loss carryovers multiple times and never got through. If this really works I'll try it, but I'm super skeptical.

It actually works by using an advanced system that navigates the IRS phone tree and waits on hold for you. Then when an agent is about to pick up, it calls you and connects you directly to that agent. They use the same IRS number but have technology that maintains your place in line without you having to stay on the phone. I was skeptical too! I tried calling the IRS for three weeks straight about my capital loss carryover question. After using Claimyr, I was connected to an IRS representative in 17 minutes. The agent was really helpful and explained exactly how to document my losses exceeding the $3K limit and how to properly track the carryforward amounts on future returns. They also confirmed that Form 8949 is always required even for simple capital transactions.

If I have the carried over loss from last year AND new losses this year, do I have to use the old losses first? Or can I choose which losses to apply? I'm trying to maximize my deduction over multiple years.

You don't get to choose - the IRS rules require you to use carryover losses first before applying new losses. The process works in this specific order: First, apply your carryover losses against any capital gains you have in the current year. If you still have carryover losses remaining and no more gains to offset, then you can use up to $3,000 of those carryover losses against ordinary income. Only if you've used up all your carryover losses and still haven't hit the $3,000 limit would you then start applying your new losses from the current year. For example, if you carried over $1,200 from last year and have $2,500 in new losses this year with no gains, you would use the $1,200 carryover first, then $1,800 of your new losses to reach the $3,000 limit. The remaining $700 of new losses would carry forward to next year.

Wash sales complicate things but your 1099-B should have the adjusted basis already calculated. You'll need to check Box B on Form 8949 (if basis was reported to IRS) and then enter the information exactly as shown on your 1099-B. The loss that was disallowed due to the wash sale is already factored into the adjusted basis amount. When using tax software, make sure you indicate that this transaction involved a wash sale if it asks. Most modern brokerages track this for you now, but it's good to double-check the amounts match what's on your 1099-B.

Thanks for explaining! That helps a lot. I was overthinking it - so I just need to copy what's on the 1099-B and the wash sale adjustment is already built into those numbers. My broker did mark it as a wash sale so I'll make sure to check that box in my tax software.