Capital Loss Carryover Calculator 2026
Estimate how short-term and long-term capital losses offset current-year gains, how much can reduce ordinary income this year, and what carries to next year.
Quick answer: how capital loss carryovers reduce tax
Capital loss carryovers first offset current-year capital gains, keeping their short-term or long-term character. If your total net capital result is still a loss, up to $3,000 can generally reduce ordinary income for the year, or $1,500 if married filing separately. Any unused loss carries forward again.
Step 1
Offset same-character gains
Short-term losses against short-term gains; long-term losses against long-term gains.
Step 2
Offset opposite-character gains
Remaining losses can reduce the other capital-gain bucket before ordinary income.
Step 3
Apply the annual loss limit
Use the Schedule D worksheet for filing, especially with AMT or unusual transactions.
Use negative numbers for current-year losses.
Enter net totals after same-category gains/losses.
Ordinary income deduction
$3,000
limit $3,000
Estimated federal savings
$660
at 22%
Next short-term carryover
$5,000
to next Schedule D
Next long-term carryover
$6,000
to next Schedule D
After offsetting
Short-term net: $-8,000
Long-term net: $-6,000
Taxable capital gain
$0
Use the capital gains calculator if this is above zero.
Total next carryover
$11,000
Carryovers keep short-term/long-term character.
Important planning note
This is a simplified planner. The IRS Schedule D carryover worksheet can differ when taxable income is low, when a prior joint return becomes separate returns, or when special capital gain categories apply. Use the official worksheet for filing.
How capital loss carryovers work
Capital losses first offset capital gains. Short-term losses offset short-term gains, long-term losses offset long-term gains, and then remaining losses can offset the opposite category. If losses still exceed gains, individuals can generally deduct up to $3,000 against ordinary income each year, or $1,500 if married filing separately.
Any unused loss carries forward. Short-term carryovers remain short-term. Long-term carryovers remain long-term. That character matters because short-term losses are usually more valuable: they can offset short-term gains that would otherwise be taxed at ordinary income rates.
Where to use this in your tax workflow
- Use the tax-loss harvesting guide before selling positions at a loss.
- Use the wash sale rule guide before repurchasing similar securities.
- Use the capital gains tax calculator when your losses are fully absorbed and taxable gains remain.
- Use the official Schedule D instructions when preparing the actual return.
Reviewed data sources
Reviewed May 22, 2026. Calculations use current public tax guidance and published source data.
1. Enter the tax scenario
Use the filing status, income type, state, payroll, deduction, credit, or transaction details that match the real case.
2. Review assumptions
Check the visible formula context, source notes, related calculators, and federal or state limits before relying on the estimate.
3. Verify before filing
Confirm final tax positions with IRS guidance, state revenue agencies, payroll records, brokerage forms, or a qualified tax professional.
Planning estimate, not tax advice
LevyIO calculators are educational planning tools. Actual federal, state, payroll, property, sales, and local tax results can change with filing status, credits, deductions, residency, employer withholding, address-level rates, and current forms. Verify final filing positions with IRS or state guidance, payroll records, tax software, or a qualified tax professional.
Frequently Asked Questions
How much capital loss can I deduct against ordinary income?
If your capital losses exceed your capital gains, the federal deduction against ordinary income is limited to $3,000 per year, or $1,500 if married filing separately. Unused losses carry forward to future tax years.
What order do capital loss carryovers use?
Capital losses first offset gains of the same character, so short-term losses offset short-term gains and long-term losses offset long-term gains. Remaining losses can then offset the other character of capital gain. If losses still exceed gains, the annual ordinary-income deduction limit applies and unused losses carry forward with their short-term or long-term character.
Do capital loss carryovers expire?
For individuals, unused net capital losses generally carry forward until used. Each future year, losses first offset capital gains, then up to the annual ordinary-income deduction limit, with any remaining loss carrying forward again.
Does this replace the Schedule D carryover worksheet?
No. This calculator is a planning estimate. Your final tax return should use Schedule D and the Capital Loss Carryover Worksheet from the official IRS instructions, especially if you have AMT, section 1256 contracts, prior joint returns, or unusual transactions.