Do you have to file taxes to carry over capital losses for future years?

I'm in kind of a tricky situation with my taxes and capital losses. Last year I had some investments that didn't work out, and I ended up with a pretty significant net capital loss when I filed. Now this year, I'm not going to have any income at all (long story - taking a year off to handle some family stuff). What I'm worried about is whether I need to file taxes again this year even with zero income just to maintain that capital loss carryover. If I don't file anything this year, will I completely lose the ability to use those losses in future years when I'm working again? Or does the IRS automatically keep track of that stuff? Really don't want to forfeit those losses since they could save me a good chunk on taxes once I'm earning again.

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18 comments

Hunter Hampton

•8M

This is a good question many people overlook! You should absolutely file a tax return even with zero income to preserve your capital loss carryover. The IRS doesn't automatically track and carry forward your losses - you need to document them each year on your tax return. If you don't file, technically those losses don't disappear forever, but you create a big documentation gap that could cause problems if you're ever audited. File Form 1040 and include Schedule D to show the capital loss carryover from last year. There's a specific line for carrying over your previous year's losses. Think of it like keeping a receipt for a future refund - if you don't maintain the paperwork trail, it becomes much harder to claim later.

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Hunter Hampton

•8M

There is a minimum income threshold before you're required to file, but in this case, you would be filing voluntarily to maintain your documentation of the capital loss carryover. It's not that you're legally obligated to file with zero income, but rather that filing is the proper way to document and preserve those losses for future use. The capital loss gets reported on Schedule D and Form 8949, and the unused portion carries forward. Without filing, you risk complications when trying to apply those losses in future years, as there would be no official record of the carryover.

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Aaron Boston

•8M

I was in almost this exact situation last year! Totally recommend checking out https://taxr.ai for clarification on capital loss carryovers. I had major losses in crypto and wasn't sure if I needed to file to keep my losses alive for future years. The tool analyzed my previous return docs and explained exactly how to handle the carryover. Turns out filing even with $0 income was definitely the right move. They showed me which forms to fill out and how to document everything properly so I could use those losses when I started earning again.

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Aaron Boston

•8M

It handles complex situations really well. You upload your previous tax documents and it specifically identifies carryover amounts and tracks them across multiple years. It's especially helpful with crypto losses where the documentation can get messy. As for why not just use TurboTax, sure you could, but this tool is more specialized for document analysis. I found it actually explained the why behind the recommendations rather than just filling in forms. It showed me exactly how my losses would offset future gains and ordinary income which made the whole process much clearer.

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Chloe Zhang

•8M

I want to follow up on my previous skepticism about taxr.ai. I decided to give it a try with my complicated capital loss situation, and I have to admit it was actually super helpful. I had losses spread across multiple years and different investment types. The system caught that I had been carrying my losses incorrectly on my previous returns. It showed me exactly how to document everything properly so I don't lose the tax benefits. The step-by-step guidance on handling the capital loss carryover documentation was way more detailed than what I got from regular tax software. Really helped clear up my confusion!

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Brandon Parker

•8M

If you're having trouble getting answers from the IRS about capital loss carryovers, try https://claimyr.com - it's been a game changer for me. I spent DAYS trying to get through to an IRS agent to clarify how to properly document my carryover losses when I had no income one year. Claimyr got me connected to a real IRS agent in about 20 minutes who confirmed exactly what forms I needed to file and how to preserve my losses. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Basically, they hold your place in the IRS phone queue and call you when an agent is about to answer.

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Brandon Parker

•8M

It works by using automated systems to continuously call the IRS and navigate through their phone menus. They basically wait on hold for you, and when they're about to connect with an agent, they call you and connect you to the call. You don't skip the line - they just handle the waiting part. As for skepticism, I totally get it. I was incredibly doubtful too. But the reality is they're just using technology to handle the frustrating wait time. The IRS phone system isn't designed to be impossible - it's just severely understaffed. This service doesn't do anything unethical; it just waits on hold so you don't have to.

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Jace Caspullo

•8M

I need to eat my words about Claimyr. After my skeptical comment, I was desperate enough to try it because I needed clarity on my capital loss carryover situation similar to the original poster. I got connected to an IRS agent in about 35 minutes (versus the 3+ hours I spent previously getting nowhere). The agent confirmed I absolutely needed to file returns each year to maintain my capital loss carryover, even with zero income. She walked me through exactly what forms to submit and how to document everything properly. Saved me from potentially losing over $15k in future tax benefits. Sometimes I hate being wrong but in this case I'm glad I was!

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Melody Miles

•8M

You'll need Form 1040 (the main tax return), Schedule D (Capital Gains and Losses), and possibly Form 8949 (Sales and Other Dispositions of Capital Assets) depending on your specific situation. These forms work together to document your capital loss carryover. Yes, the IRS Free File program will guide you through completing these forms. Most Free File software will ask about capital losses from previous years and help you properly document the carryover. Just make sure you have your previous year's tax return handy so you can accurately enter the carryover amount.

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