Capital Loss Carryover Calculator

About the Capital Loss Carryover Calculator

This calculator is designed to help you estimate how much of your capital losses may be used in the current tax year and how much may carry forward to future years. It focuses on capital loss carryovers from investments such as stocks, mutual funds, ETFs, and other capital assets.

When you sell an investment for less than what you paid, you create a capital loss. Tax rules generally allow you to use these losses to offset capital gains and, up to a limit, ordinary income. If your losses exceed what you can use in a single year, the unused amount may be carried forward to future years. This tool helps you estimate that remaining carryover based on simplified inputs.

How Capital Loss Carryovers Work (Conceptual Overview)

In many tax systems (for example, U.S. federal income tax), capital losses are applied in a sequence:

1. Net your capital gains and losses for the year (short-term and long-term, following the specific ordering rules that apply to you).
2. Apply any prior-year capital loss carryover to this year’s net capital gains.
3. If you still have a net capital loss, you may be able to deduct up to a fixed maximum against ordinary income (for example, up to $3,000 for many U.S. taxpayers, or $1,500 if married filing separately, subject to current law).
4. Any remaining unused loss after that limit becomes your new capital loss carryover to future years.

The exact numbers and rules depend on your jurisdiction and current law, but the basic idea is similar: unused capital losses are not lost; they can often be used in later years to reduce taxable income.

Key Formulas (Simplified)

The calculator implements a simplified version of the carryover logic. Conceptually, you can think of it as:

1. Start with prior-year unused capital loss.
2. Combine it with current-year net capital gain or loss.
3. Apply a maximum amount you can deduct this year.
4. The rest (if negative) is carried forward.

In more formula-like terms, suppose:

• P = prior-year unused capital loss (carryover into this year, usually a positive number representing the amount of loss available)
• C = current-year net capital gain (positive) or net capital loss (negative)
• D = maximum capital loss deduction against ordinary income for the year (for example, $3,000 in some systems)

A simplified set of relationships can be expressed as the following MathML block:

This representation shows that:

• You first combine prior-year losses and current-year results.
• You then determine how much of that overall loss may be deducted this year.
• Whatever is left (if still a loss) becomes the carryover to the next year.

The actual numeric logic in this calculator may vary slightly from the above conceptual MathML, but it is based on the same idea: starting balance + current-year result → amount used this year + amount that remains.

How to Use This Calculator

The input fields on the page correspond to simple, high-level concepts:

• Primary Value – Enter your prior-year unused capital loss carryover going into the current tax year. This is typically the amount shown on your prior-year tax return as the capital loss carried forward. Use a positive number even though it represents a loss.
• Secondary Value – Enter your current-year net capital gain or loss. If you have an overall gain, enter it as a positive number; if you have an overall loss, enter it as a negative number if the form allows, or follow any specific on-page instructions for representing losses.

After you enter these values, select the calculate button. The calculator will estimate how much of your combined losses could potentially be used this year and how much may carry forward to future years, under the simplifying assumptions described below.

Interpreting the Results

When you run the calculation, you will typically see the following conceptual outputs (even if the page groups or labels them differently):

• Total loss available – The sum of your prior-year carryover and your current-year net capital result. If this figure is still negative after offsetting this year’s gains, you have an overall net capital loss position.
• Estimated amount usable this year – An approximation of how much capital loss might be applied in the current year, subject to a deduction limit for ordinary income and any assumptions built into the calculator.
• Estimated carryover to next year – The remaining loss that could potentially be carried into the next tax year, assuming the same rules and no other adjustments.

These outputs are estimates. They are intended to help you gauge the magnitude and timing of your capital loss benefits, not to finalize your tax return.

Worked Example

Consider the following simplified scenario for illustration:

• Prior-year unused capital loss carryover (Primary Value): $10,000
• Current-year net capital gain (Secondary Value): $4,000
• Assumed maximum annual deduction against ordinary income: $3,000

Step-by-step, the logic might look like this:

1. Combine carryover with current year: $10,000 prior-year loss offsets the $4,000 current-year gain, leaving a net loss of $6,000.
2. Apply annual deduction limit: You may be able to deduct up to $3,000 of this remaining $6,000 against ordinary income this year (subject to the rules that apply to you).
3. Determine carryover: The remaining $3,000 ($6,000 total loss minus $3,000 used this year) would be an estimated capital loss carryover to next year.

The calculator is intended to automate this type of reasoning. You enter your own figures instead of the $10,000 and $4,000 in this example, and the tool helps illustrate how much loss might be usable now versus later.

Capital Loss Use vs. Carryover: Comparison Table

The table below summarizes, at a high level, how current use of capital losses compares with carrying losses forward:

Assumptions and Limitations

This capital loss carryover calculator is a simplified educational tool. It does not perform a full tax return calculation and does not replace tax preparation software or professional advice. Important limitations include:

• Jurisdiction-specific rules: Tax treatment of capital gains, losses, and carryovers varies by country and sometimes by state or province. The explanation on this page uses concepts that are common in U.S. federal tax law, but your local rules may differ.
• Short-term vs. long-term gains: Many tax systems treat short-term and long-term capital gains differently and apply a specific ordering when netting gains and losses. This calculator typically uses aggregate figures and does not model each holding separately.
• Filing status and income level: Limits on capital loss deductions can depend on your filing status, income, and other factors. The tool uses generic assumptions and cannot reflect all individual circumstances.
• Other tax attributes: Items such as wash sales, capital loss limitations for specific asset types, and special adjustments for certain investments are not modeled.
• Changes in law: Tax rules can change over time. The logic and examples described here may not reflect the most current law in your jurisdiction.

Because of these limitations, treat the results as an estimate to inform planning conversations or to get a quick directional sense of your potential carryover, not as a final answer. For filing decisions or complex situations, review the official tax instructions for your jurisdiction or consult a qualified tax professional.