Track unused capital losses across multiple tax years. $3,000/year ordinary-income offset plus unlimited future-gain offset. Short-term and long-term tracked separately per IRS rules.
Capital losses are valuable: they offset capital gains dollar-for-dollar (same type first — short-term losses against short-term gains, long-term against long-term, then cross over), and up to $3,000 of net loss in any given year reduces ordinary income. Unused losses carry forward indefinitely until either consumed by future gains or you die (carryovers don't transfer to heirs).
The tracker keeps your loss bank organized. Inputs each year: prior-year short-term and long-term loss carryover (from Form 1040 Schedule D worksheet), current-year capital gains and losses (from your 1099-B and other transactions). Output: how much offset against current-year ordinary income (capped at $3,000), how much carryover into next year, broken out by short-term and long-term.
Practical use: most people who tax-loss-harvest during a bad market year accumulate $20k-$50k+ of loss carryovers. Years later, when they have a big gain (stock concentration sale, RSU vest, business exit), the carryover wipes out the gain. Without tracking, the carryover gets lost or forgotten — especially if you switch tax software or use a CPA who doesn't roll the carryover forward correctly.
Step 1 — Enter prior-year carryovers. From last year's Schedule D worksheet (the IRS's Capital Loss Carryover Worksheet): short-term carryover, long-term carryover. Both can be in the $thousands or more after a bad market year.
Step 2 — Enter current-year activity. Short-term gains, short-term losses, long-term gains, long-term losses. From 1099-B (broker statements) and any other capital transactions.
Step 3 — Read the output. The tracker applies IRS netting rules (ST vs ST first, LT vs LT first, then cross-over), reports net capital gain or loss for current year, applies $3,000 cap on ordinary-income offset, and computes the carryover into next year (also split ST and LT).
Enter your prior-year unused losses (short-term and long-term separately) and current-year gains. The tracker shows how much offsets ordinary income, how much carries forward, and the remaining bank.
Open the tracker →If your net capital loss for the year (after netting gains and losses) is more than $3,000, you can only deduct $3,000 against ordinary income in that year ($1,500 if MFS). The excess loss carries forward indefinitely. Example: $15,000 net loss year 1 → $3,000 deducted, $12,000 carries forward. Year 2 has $5,000 gain → $5,000 of carryover offsets gain to $0, then $3,000 more offsets ordinary income, remaining $4,000 carries forward. And so on.
Yes. The IRS keeps short-term loss carryover and long-term loss carryover as separate buckets that get tracked on the Schedule D worksheet. Within the year, they net against same-type gains first (ST losses offset ST gains first), then cross-over (excess ST loss can offset LT gain, and vice versa). The carryover into next year preserves the ST and LT character of any unused losses.
Capital loss carryovers do NOT transfer to your heirs or your estate. The Tax Reform Act of 1986 made carryovers expire at death — the loss bank is personal and dies with you. Practical implication: if you have a large accumulated carryover and a terminal diagnosis or advanced age, harvesting gains to consume the carryover (selling appreciated stock you'd been holding) is better than leaving the carryover unused. Heirs get step-up in basis on inherited appreciated assets anyway.
Usually yes if you have unrealized losses and other capital gains in the same year or expect to have gains soon. Harvesting realizes the loss for tax benefit, then you reinvest the proceeds in a similar (but not 'substantially identical') asset to maintain market exposure. The 'wash sale' rule (IRC §1091) disallows the loss if you buy back the same security within 30 days before or after the sale — so you swap to a similar fund (e.g. sell VTI, buy ITOT — both are total US market but different funds).