Capital loss carryover: the $3,000 limit (2026)

When capital losses exceed capital gains for the year, the net capital loss can offset ordinary income only up to $3,000 ($1,500 if married filing separately). Unused net capital loss generally carries forward to later years until it is used. The character of the carryover (short-term vs long-term) is preserved under Schedule D rules and can change which gains it offsets first in a later year.

Netting happens before the $3,000 gate. Short-term gains and losses net, long-term gains and losses net, then the two nets combine. A large long-term loss can wipe out short-term gain, and leftover loss then faces the ordinary-income cap. Tax-loss harvesting is the planning name for realizing losses on purpose; the wash-sale rule can disallow a securities loss if you repurchase a substantially identical position too soon.

Retirement accounts do not create currently deductible capital losses when you trade inside an IRA or 401(k). Harvesting belongs in taxable accounts. Inherited and gifted assets have special basis rules that can turn an expected loss into a smaller loss or a gain.

A prior-year capital-loss carryover reduces net gain (or creates a net loss) on the current Schedule D. That can lower regular tax and can reduce net investment income for Form 8960 NIIT. It does not automatically create a refund of prior-year NIIT.

States may conform to federal loss limits or use their own. This calculator lets you enter a prior-year capital-loss amount as a planning input on the profile; it is not a multi-year Schedule D worksheet and does not track separate short-term and long-term carryover columns.

Form 8949 still lists the current-year sales. The carryover is a Schedule D figure, not a fake extra 8949 lot. If a wash sale disallows a current-year loss, that loss does not increase this year’s deductible loss or carryover until it is later realized through basis.

On the national calculator, enter the unused loss from last year’s Schedule D in the prior-year capital-loss field, then add this year’s lots. The engine nets the carryover against this year’s gains for the estimate. For a single brokerage sale, the stocks lander is enough; for mixed assets stay on the homepage so routing does not jump to one lander.

Read the wash-sale and tax-loss harvesting guides before you sell losers and immediately rebuy. Confirm the $3,000 ordinary-income limit, carryover worksheets, and state conformity with a CPA. Educational only.