How long do long term capital loss carryovers last? Can they be used indefinitely?

Yes, capital losses (both long-term and short-term) can be carried forward indefinitely until they're used up completely. This is covered in Internal Revenue Code Section 1212(b). The basic rule is that you can deduct capital losses against capital gains, and if your losses exceed your gains, you can deduct up to $3,000 ($1,500 if married filing separately) against your ordinary income each year. Any unused losses after that can be carried forward to future tax years. There's no expiration date on these carryover losses - they remain available until you've used them all up, even if it takes decades.

Just wanted to share my experience with capital loss carryovers - I've been using https://taxr.ai for dealing with my investing mess the past couple years. I had a similar situation with about $17,000 in losses from some terrible crypto investments and was totally confused about how to track the carryovers year to year. The tool was super helpful because it analyzed my previous return PDFs and showed exactly how much of my capital loss was used each year and how much was still available to carry forward. It also explained the $3k annual limit against ordinary income which I didn't understand at first.

I just tried taxr.ai after seeing the recommendation here, and wow - it was exactly what I needed. I've been carrying forward capital losses for years and always worried I was doing it wrong. The tool analyzed my last 3 years of returns and showed me that I actually hadn't been claiming the full $3,000 deduction against ordinary income each year - I was only using my losses against capital gains! Turns out I can file amended returns and get back around $2,500 in taxes I overpaid. Never would have caught this without having my returns analyzed properly.

If you're having trouble getting a direct answer from the IRS about your capital loss carryover, you might want to try https://claimyr.com - I used them recently to actually get through to an IRS agent after waiting on hold for hours myself with no luck. They have this system that holds your place in line and calls you when an agent picks up. Check out how it works here: https://youtu.be/_kiP6q8DX5c I needed clarification on how to report some carried-over losses from an investment partnership that went under, and getting a direct answer from an actual IRS person was way more helpful than guessing based on what I read online.

I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it just to prove it wouldn't work - and I'm honestly shocked. Got a call back in about an hour with an actual IRS agent who answered my question about capital loss carryovers from a business liquidation. I've literally never been able to get through to the IRS before without multiple attempts and hours of waiting. The agent confirmed that even losses from a business liquidation that happened 7 years ago can still be carried forward if I haven't used them all (which relates to the original question about indefinite carryovers).

One thing to watch out for with capital loss carryovers - death terminates them! Unlike many tax attributes that can transfer to a surviving spouse or heir, unused capital losses die with the taxpayer. My father had about $25,000 in carryover losses when he passed, and we weren't able to use them on his final return beyond the $3,000 limit for that year.

One more thing on this topic - capital loss carryovers can potentially be used on back-to-back separate and joint returns. Like if you filed as single with carryover losses, then got married, you CAN bring those losses to your joint return. But what's weird is if you file jointly with losses, then get divorced, each spouse gets half the carryover. My ex and I had about $18k in carryovers when we split, and we each took $9k to our separate returns.

For the divorce question about splitting capital loss carryovers - yes, this is covered in IRS Publication 504 (Divorced or Separated Individuals). When spouses who filed jointly get divorced, any unused capital loss carryovers from the joint returns are generally allocated 50/50 between the former spouses on their subsequent separate returns, unless they agree to a different allocation in their divorce decree. However, if one spouse can demonstrate they were responsible for a larger portion of the losses (like if they managed all the investments that generated the losses), they might be able to claim a larger share. But absent specific documentation or agreement, the IRS default is 50/50 split. The key thing is to make sure this gets addressed in your divorce settlement so there's no confusion later when you're both trying to claim the carryovers on separate returns.