How much capital loss you deduct this year and how much carries forward, short or long
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 29 Sept 2026.Net capital losses reduce ordinary income by at most $3,000 a year, or $1,500 if married filing separately; the rest carries forward with no time limit and keeps its short-term or long-term character. Enter this year’s gains, any carryover from last year and the losses you realised to see the deduction and the carryover the Schedule D worksheet would give.
$720
From harvesting $12,000 of losses, at a 24% ordinary and 15% long-term rate.Federal only, at the marginal rates you enter. An estimate, not tax advice.
| Harvested losses used against | Amount |
|---|---|
| Short-term gains (taxed at 24%) | $0 |
| Long-term gains (taxed at 15%) | $0 |
| Ordinary income (up to $3,000) | $3,000 |
| Carried forward | $9,000 |
| Total harvested | $12,000 |
Rates and rules read from IRS Topic no. 409, Capital gains and losses on 29 Sept 2026; they may have changed since.
The example starts with $12,000 in "Long-term losses to harvest" and no gains; replace it with your own net loss.
Pick your "Filing status"; married filing separately has a lower limit.
Enter any "Short-term carryover from last year" and "Long-term carryover from last year".
Read "Taken off ordinary income" and "Carried forward to next year", and open "Where the losses went".
The tax the deduction saves is shown too.
Tax-loss harvesting means selling investments that are worth less than you paid, so the loss cancels gains you have already taken or will take. The saving depends on which gains the loss cancels, because short-term gains are taxed as ordinary income and long-term gains at 0%, 15% or 20%.
How the netting works. The IRS nets short-term losses against short-term gains and long-term losses against long-term gains first. Only then are the two net figures combined. A long-term loss that ends up cancelling a short-term gain saves tax at your ordinary rate, which is why the order matters. This calculator shows where each dollar of harvested loss went: short-term gains, long-term gains, ordinary income or the carryforward.
The $3,000 limit. When losses exceed gains, IRS Topic 409 lets you deduct the smaller of the net loss and $3,000 ($1,500 if married filing separately) from other income. The rest carries forward to later years with no time limit, and keeps its short-term or long-term character. The deduction is taken from the short-term loss first, following the Capital Loss Carryover Worksheet.
The rest of the article, and all 6 questions about Tax-Loss Harvesting Calculator, are on the Tax-Loss Harvesting Calculator page.
Each dollar of loss saves your tax rate on the gain it cancels. Against a short-term gain in the 24% bracket, $1,000 of loss saves $240; against a long-term gain at 15%, $150. Past your gains, up to $3,000 of net loss comes off ordinary income, and anything beyond carries forward to later years.
Yes, up to $3,000 a year, or $1,500 if married filing separately, once losses exceed all your capital gains. IRS Topic 409 sets the limit as the smaller of that amount and the net loss on Schedule D line 16. Any loss above the limit carries forward to the next year with no expiry date.
Only after they have offset short-term gains. The IRS nets short-term against short-term and long-term against long-term first, then combines the two results. A net short-term loss then reduces a net long-term gain, and a net long-term loss reduces a net short-term gain, which saves tax at the higher ordinary rate.
Net losses above the $3,000 deduction move to next year and keep their character, short-term or long-term. Next year they are treated as if realised then, offsetting gains first and then up to $3,000 of income again. The Capital Loss Carryover Worksheet in the Schedule D instructions figures the amounts, taking this year's deduction from short-term losses first.
Rates and rules change; check the source before you rely on a figure.
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