For investors

Old investment losses keep working, year after year.

Capital losses you could not fully use do not expire. They carry forward, offsetting up to three thousand dollars of ordinary income a year and waiting to wipe out future gains.

Watch the quick version

See how it works through one simple example.

Is this you?

You had investment losses in a past year you could not fully deduct.
Carryforwards follow you until they are used up.

Here is the idea, in plain words

Capital losses first offset capital gains. Any extra can offset up to three thousand dollars of ordinary income each year.

Whatever is still left does not expire. It carries forward to future years.

That reserve sits ready to erase future capital gains, tax-free, whenever they appear.

What this could be worth

Up to $3,000 a year off ordinary income, plus an unlimited reserve against future gains.
  • 1Track your unused losses from prior years.
  • 2Each year, offset gains first, then up to $3,000 of ordinary income.
  • 3Carry the remainder forward until it is fully used.

Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.

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What to watch out for

The honest version.

  • You must actually report and track the carryforward each year to keep it.
  • Short-term and long-term losses have ordering rules.
  • Losses inside retirement accounts do not count.

Common questions

Do losses expire?

No. Unused capital losses carry forward indefinitely until used.

How much hits ordinary income?

Up to three thousand dollars a year, after offsetting any capital gains.

What happens to the rest?

It carries forward to offset future gains and income.

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