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Capital Loss Carryover Calculator

Apply current-year gains/losses, the $3k ordinary income offset, and prior carryover to see next year’s capital loss carryover.

Results

Total losses available
$7,000
Losses used against gains
$7,000
Ordinary income offset
$3,000
Carryover to next year
$4,000

Overview

Use this capital loss carryover calculator to see how your realized gains and losses flow through the IRS ordering rules. Capital losses first offset capital gains, then up to $3,000 (or $1,500 if married filing separately) can reduce ordinary income, and any remaining loss becomes your carryover to next year. Instead of guessing how much loss will still be available in the future, you get a simple breakdown of how each dollar is used.

How to use this calculator

  1. Enter your current-year realized capital gains as a positive dollar amount. Include both short-term and long-term gains; the calculator treats them as a single combined figure.
  2. Enter your current-year realized capital losses as a positive number. Even though losses are negative in reality, entering them as positive makes the inputs easier to work with; the tool treats them as losses internally.
  3. Enter your prior-year capital loss carryover from last year’s return. You can usually find this on the capital loss carryover worksheet or in the carryover summary section of your tax software.
  4. Enter the ordinary income offset limit you want to use. For most filers this is $3,000; if you are married filing separately, change this to $1,500 or to any different limit you want to model.
  5. Review the results section to see: total losses available, losses used against gains, losses used to offset ordinary income (up to the limit), and the remaining capital loss carryover that moves into next year.
  6. Try adjusting gains, losses, and carryover inputs to model different scenarios, such as realizing additional losses at year-end or harvesting gains while you still have loss carryovers available.

Inputs explained

Current-year capital gains
Total realized capital gains for the year before applying any losses or carryovers. Combine both short-term and long-term gains into a single dollar amount for this simplified calculator.
Current-year capital losses
Total realized capital losses for the year entered as a positive number. The calculator treats this as a loss and adds it to any prior carryover when computing losses available.
Prior-year loss carryover
Capital loss carryover from last year’s tax return. This is the portion of prior-year loss that was not fully used and is still available to offset gains or ordinary income this year.
Ordinary income offset limit
The maximum amount of net capital loss you can use to offset ordinary income this year. By default this is set to $3,000 to reflect the common IRS limit, but you can change it (for example, to $1,500 for married filing separately or to test potential law changes).

How it works

We start by combining your current-year capital losses with any prior-year loss carryover to compute total losses available for the year. This represents the full pool of loss you can apply under the rules.

Next we net losses against current-year capital gains. If your gains are smaller than your total losses, only part of the loss is used and you will still have remaining loss to apply further. If gains exceed losses, all of the loss is absorbed here and there is no carryover.

If there are losses left after offsetting gains, you may be able to use some of that remaining loss to reduce ordinary income (wages, interest, business income, etc.). The calculator applies the ordinary income offset limit you enter (commonly $3,000 per year for most filers) and caps the ordinary offset at that value.

Any loss still left after offsetting both gains and the ordinary income limit becomes your capital loss carryover to the following tax year. That carryover can be used in future years using the same ordering: first against gains, then up to the ordinary limit, with any remainder continuing to carry forward.

The computation is intentionally simplified and does not attempt to calculate your actual tax bill. It focuses on the mechanical sequence of how losses are applied so you can better understand why carryover balances persist over time.

Formula

Total losses = Current losses + Prior carryover
Losses vs gains: offset gains first
Ordinary offset = min(remaining losses, ordinary income limit)
Carryover next year = remaining losses − ordinary offset

When to use it

  • Planning end-of-year tax-loss harvesting by seeing whether additional realized losses will create new carryover or simply offset gains you already have.
  • Estimating next year’s capital loss carryover after a year with large realized losses so you can understand how long those losses may last as you gradually offset gains and ordinary income.
  • Evaluating whether to intentionally realize capital gains in a low-tax year when you still have a sizable loss carryover that can shelter those gains.
  • Reviewing how a one-time event (such as selling a business, rental property, or large stock position) interacts with existing loss carryovers and how much loss will remain afterward.
  • Explaining the loss ordering rules to clients or family members using concrete inputs and outputs instead of abstract tax code language.

Tips & cautions

  • Losses always offset capital gains before they can offset ordinary income. If you have significant realized gains, expect most or all of your loss to be used there first.
  • In reality, the IRS tracks short-term and long-term losses separately and applies them against the same type of gains first. This tool simplifies that by combining everything into a single pool; always rely on official IRS worksheets when preparing your return.
  • Use the ordinary income limit field as a lever for scenario testing. If you want to see the impact of a future law change or a hypothetical higher/lower limit, simply adjust the input and rerun the calculation.
  • Consider running two scenarios side by side: one with your current plan and one where you realize additional gains or losses. Comparing the resulting carryover amounts can clarify which strategy better fits your long-term plan.
  • Remember that the real tax savings from using losses depends on your marginal tax rates for ordinary income and capital gains, which this calculator does not compute. Use it as a structural guide, not as a full tax estimator.
  • Simplified model that does not track short-term vs long-term character or apply the detailed ordering rules between those buckets.
  • Does not calculate your actual tax owed, tax brackets, or marginal rates; it only shows how much loss is applied in each category and how much is carried forward.
  • Does not account for wash sale rules or other disallowance provisions that can prevent you from claiming certain losses when you repurchase substantially identical securities.
  • Assumes you can fully benefit from the ordinary income offset limit you enter; in real life, your overall income picture and other deductions may change the effective benefit.
  • Not tax or legal advice. Use this calculator for education and planning only, and confirm details with IRS instructions, official worksheets, or a qualified tax professional before filing.

Worked examples

$5k loss, $0 gains, $2k carryover

  • Current-year losses = $5,000; prior carryover = $2,000; total losses available = $7,000.
  • There are no current-year gains, so none of the loss is used against gains.
  • Ordinary income offset limit = $3,000, so $3,000 of the $7,000 total loss is applied against ordinary income.
  • Carryover to next year = $7,000 − $3,000 = $4,000.

$8k loss, $5k gains, $1k carryover

  • Current-year losses = $8,000; prior carryover = $1,000; total losses available = $9,000.
  • Losses first offset the $5,000 of current-year gains, leaving $4,000 of loss still available.
  • Ordinary income offset limit = $3,000, so $3,000 of the remaining $4,000 is used to reduce ordinary income.
  • Carryover to next year = $4,000 − $3,000 = $1,000.

Big gains with smaller carryover

  • Current-year gains = $40,000; current-year losses = $5,000; prior carryover = $10,000; total losses available = $15,000.
  • Losses first offset gains: $15,000 of loss reduces the $40,000 of gains, leaving $25,000 of gains still taxable.
  • Because all loss was used against gains, there is no loss left to apply to ordinary income and no carryover to next year.

Deep dive

This capital loss carryover calculator walks through the IRS ordering rules step by step so you can see exactly how current-year gains, current-year losses, and prior carryovers interact.

Enter your realized capital gains and losses plus any prior-year carryover to see how much loss offsets gains, how much can reduce ordinary income up to the $3,000 limit, and how much carries into next year.

Use the tool to plan tax-loss harvesting, decide whether to realize gains in a low-income year, or simply understand why your tax software still shows a loss carryover after several years of investing.

FAQs

Does this calculator distinguish between short-term and long-term losses?
No. For simplicity, it combines all gains and losses into a single pool and applies them in aggregate. The real tax rules track short-term and long-term character separately, so always rely on official IRS worksheets when filing.
Can I change the $3,000 ordinary income limit?
Yes. The ordinary income offset limit is a user input. Set it to $3,000 for most filing statuses, $1,500 for married filing separately, or another value if you want to model potential law changes.
Does this calculator tell me my tax owed?
No. It only shows how much loss is used against gains, how much may be used against ordinary income given your chosen limit, and how much carries to future years. Your actual tax bill depends on your full return and tax brackets.
Are wash sale rules included?
No. The model assumes all losses are allowed. If you repurchase substantially identical securities within the wash sale window, some or all of a loss may be disallowed or deferred under IRS rules, which this tool does not attempt to handle.
Is this tax advice?
No. This is an educational planning aid to help you visualize loss utilization and carryovers. Always confirm numbers with tax software, IRS instructions, or a qualified professional before you file.

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This capital loss carryover calculator is a simplified educational tool. It does not track short-term vs long-term character, apply wash sale limitations, or calculate your tax owed. Use it to understand the sequence in which losses are applied and to explore planning scenarios, but rely on IRS rules, official worksheets, and professional tax advice for actual filing decisions.