I know the max amount of losses you claim per year on staocks is $3000. Does the amount beyond that carry forward for $3000 every year until all the losses are claimed? If i lost $20,000 last year and could only get back $3000. Does that mean I can claim $3000 this year and $3000 every subsequent year until that amount is zero?
Thanks

Capital losses in excess of $3,000 are carried forward to the subsequent year(s). In your case, you could deduct a net of $3,000 per year until your whole loss has been exhausted.

Another strategy would be to sell of a gain position (if you have any available to you). This gain would be offset by the carryforward losses, thereby accelerating utilization of the loss. Your gain would be tax free.

Zip Code: harryrwiglercpa@aol.com

Each year, you first use all of your capital losses, including capital losses carried forward from the prior year, to offset any capital gains realized during the year (including capital gain distributions from your mutual funds held in taxable accounts). You can then take up to $3,000 in excess losses, and claim those losses against your salary and other "ordinary income".

Zip Code: aschwartz@mdtaxes.com