Capital Loss Carryover Calculator
Calculate how much of your net capital loss you can deduct against ordinary income this year (up to $3,000) and how much carries forward to future tax years using 2026 IRS Schedule D rules.
| Net short-term result | — |
| Net long-term result | — |
| Total net capital loss | — |
| Short-term carryover | — |
| Long-term carryover | — |
| Years to fully use loss | — |
What Is a Capital Loss Carryover?
A capital loss carryover is the unused portion of a net capital loss that the IRS lets you deduct in future tax years when this year's loss exceeds the annual limit. Under 2026 IRS rules, you can offset capital losses against capital gains without limit, then deduct up to $3,000 of remaining net loss against ordinary income ($1,500 if Married Filing Separately). Anything beyond that carries forward indefinitely until fully used (source: irs.gov Topic No. 409).
The carryover keeps its character: short-term losses stay short-term, long-term losses stay long-term. This matters because short-term losses offset short-term gains first (which are taxed at ordinary income rates up to 37%), and long-term losses offset long-term gains first (taxed at 0%, 15%, or 20%). Tracking this on IRS Schedule D and the Capital Loss Carryover Worksheet is essential to avoid overpaying tax.
How the 2026 Carryover Math Works
The calculation runs in three steps. Step 1 — net short-term and long-term separately. Short-term gains minus short-term losses gives your net short-term result. Long-term gains minus long-term losses gives your net long-term result. Step 2 — combine. If both are losses, add them. If one is a loss and the other a gain, the loss offsets the gain first (short-term loss offsets long-term gain, and vice-versa, after netting). Step 3 — apply the $3,000 ordinary income limit. Anything above $3,000 ($1,500 MFS) carries to next year.
Example: Net short-term loss $6,000, net long-term loss $4,000, total $10,000 loss. Single filer deducts $3,000 against ordinary income this year, carries $7,000 forward. At a 24% marginal rate that $3,000 deduction saves roughly $720 in federal tax, plus state tax savings if your state recognizes the loss. The remaining $7,000 keeps offsetting future gains and ordinary income $3,000/year until exhausted (source: IRS Schedule D instructions).
Strategy — When Carryovers Compound With Tax-Loss Harvesting
Investors with large carryover balances unlock options. First, you can sell appreciated holdings without tax — long-term gains are absorbed by long-term carryovers dollar-for-dollar with zero tax due. Second, you maintain the $3,000 ordinary deduction every year until the loss is consumed, which compounds in higher tax brackets. Third, you can deliberately rebalance a concentrated position you have wanted to exit but were stuck on due to embedded gain. Carryovers from market crashes (2022 stocks, 2022 crypto, 2008 housing) often produce 5-10 years of tax-free rebalancing capacity.
Key trap: the wash-sale rule disallows a loss if you re-buy substantially identical securities within 30 days before or after the sale. Use our wash-sale rule calculator to verify before harvesting. For broader portfolio strategy, see our tax-loss harvesting calculator and capital gains tax calculator.
Filing — Schedule D and Form 8949 in 2026
Report each individual sale on IRS Form 8949, then summarize on Schedule D. The Capital Loss Carryover Worksheet (in the Schedule D instructions) computes next year's carryover automatically — but most consumer tax software does this only if you import last year's return. If you switched preparers or filing software, you must manually enter prior-year carryover or the loss is silently lost. The IRS opened the 2026 filing season on January 26, 2026, with a return deadline of April 15, 2027 for tax year 2026 (source: irs.gov).
Last updated April 2026. Estimates only — consult a tax professional for AMT, NIIT, state-tax interaction, and partnership/S-corp pass-through losses. Sources: IRS Topic No. 409, Schedule D instructions.