How to track tax loss harvesting carryover for multiple years?

That's a tough situation, but the good news is that most tax software does handle capital loss carryovers pretty well. When you report the initial large loss this year, your tax software will calculate how much is used this year and how much will be carried forward. In following years, the software should ask you about capital loss carryovers or even remember them from your previous year's return if you use the same software. The IRS Form 1040 Schedule D and the accompanying Capital Loss Carryover Worksheet will track this information for you. Each year, your tax software will first apply your carryover losses against any capital gains for that year. Then it will allow up to $3,000 ($1,500 if married filing separately) against your ordinary income. Any remaining losses will carry forward to the next year. For your own records though, I'd recommend keeping your tax returns from each year so you can verify the numbers. The Schedule D and worksheets will show your remaining loss carryover amount.

After dealing with a similar situation last year, I found that taxr.ai really helped me keep track of all my investment losses and carryovers. I had about $32k in losses from some terrible tech stock choices, and I was confused about how to properly track everything across multiple years. I uploaded my investment statements to https://taxr.ai and it analyzed everything, helping me understand exactly how much I could deduct each year and how my losses would offset future gains. The system actually created a multi-year projection showing how my carryover would work based on estimated future gains. Saved me so much headache!

Just wanted to follow up about taxr.ai since I decided to try it out. I was skeptical at first, but it really did make tracking my loss carryovers much easier. I uploaded my statements from the last two years, and it immediately showed me exactly how much of my carryover loss I've used and how much I have left. The multi-year projection feature is actually pretty cool - it shows different scenarios based on potential future gains. I can see exactly how selling some of my current investments would affect my carryover losses. The export to TurboTax worked perfectly too. Definitely worth it for anyone with complicated investment situations or large capital losses to track.

If you're having trouble getting clarity on your tax loss harvesting situation, I had the same issue last year and ended up needing to speak directly with the IRS. After waiting on hold for HOURS multiple days in a row, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. I was super skeptical, but it worked perfectly. Got connected with an IRS agent who confirmed exactly how my loss carryovers should be tracked and what records I need to keep. The agent even explained some nuances about how different types of capital gains interact with carryover losses that I hadn't understood from just reading online.

I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it myself just to prove it wouldn't work. I had a complicated question about my loss carryovers that I'd been trying to get answered for months. Well, I'm eating my hat now. The service actually connected me to an IRS agent within about 90 minutes. The agent walked me through exactly how to document my capital loss carryovers and cleared up confusion about how my rental property income affects the calculation. I was honestly shocked that it worked. After years of frustration trying to reach the IRS, I finally got the answers I needed. For anyone struggling with complex tax questions that only the IRS can answer, it's absolutely worth using.

Something that really helped me track my capital loss carryovers was creating a simple spreadsheet. I've been carrying losses forward for about 5 years now. Each year I record: 1. Starting loss carryover amount 2. Any capital gains for the year (which reduce the carryover) 3. The $3,000 deduction against ordinary income 4. The new carryover amount This gives me a quick reference I can check against what the tax software calculates. I've caught a couple discrepancies this way where I had entered something incorrectly in the software.

One important thing to remember about tax loss harvesting - the IRS distinguishes between short-term and long-term capital losses! They get applied in a specific order: 1. Short-term losses first offset short-term gains 2. Long-term losses first offset long-term gains 3. If you have net losses in one category and net gains in the other, they offset each other 4. Then you can take up to $3k against ordinary income 5. Any remaining losses carry forward So make sure your tracking system accounts for this, because it can affect your tax rate in future years depending on what kind of gains you have.

Great question about tracking capital loss carryovers! I've been dealing with this exact situation for the past 3 years after some unfortunate investment decisions during the market volatility. One thing I learned the hard way is to keep detailed records beyond just relying on tax software. While most software does track carryovers reasonably well, I've found it helpful to maintain my own backup documentation. I keep a simple folder with: 1. Copy of each year's Schedule D and Capital Loss Carryover Worksheet 2. All 1099-B forms and investment statements 3. A one-page summary showing my remaining carryover balance each year The reason this became important for me is that I switched from TurboTax to FreeTaxUSA one year, and while the new software asked about prior year carryovers, having my own records made the transition seamless. I could easily verify that the carryover amounts were entered correctly. Also, don't forget that if you have a really large loss like yours, you might want to consider the timing of future gains strategically. For instance, if you're planning to sell some winners, you might want to spread those sales across multiple years to make the most of your loss carryover rather than using it all up in one year with a large gain. The 9+ year timeline you mentioned is actually pretty common with substantial losses. Just stay organized and you'll be fine!