Unrecovered Capital Loss

[Christian]

An older client passed on in December 2018. She has a remaining capital loss of about $6000 yet to be recovered. I am thinking you simply deduct the full balance on this her final return but knowing the IRS they may require some less simple method. Any input is appreciated.

[Abby Normal]

Excess capital losses die with the decedent. I had one where over 320k was lost. You can claim the 3k against ordinary income.

[Christian]

I guess Abby they figure dead men tell no tales.  Now we know where they recoup those mileage depreciation losses.

[Lion EA]

Dead clients cannot vote (except in Chicago where I grew up).

[Possi]

OMG that's the saddest thing I've heard all day..... 

[Randall]

And I don't think they can be carried over by surviving spouse.  I know NOL can't, not sure about capital loss.

[jklcpa]

3 hours ago, Randall said:

And I don't think they can be carried over by surviving spouse.  I know NOL can't, not sure about capital loss.

 

Correct, capital loss dies with the individual and is NOT available for use by the surviving spouse.

Rev. Rul. 74-175 provides that "capital loss carryovers expire upon a taxpayer's death and cannot be used on the estate's income tax return. The decedent cannot transfer a capital loss carryover to the estate because the decedent and estate are separate tax entities. A taxpayer's capital loss carryovers also cannot be transferred to the surviving spouse."