Schedule D

[MargaretMort]

Client has long term capital loss carry-over. I realized, after completing the return, that the Sch D was showing the carry-over to be the same as the 2009 carry-over. That can't happen because he is no longer day trading or anything else with the stock market, this is strictly carry-over loss. I checked to see if the Sch D is current, doesn't look like it. Has anyone else run into this or is it just me messing up somewhere. MM

[TaxmannEA]

If there is no other activity on the Sch D, then the program should have taken $3000 loss to the 1040 and carried the rest over to the next year. May be a program error?

[taxit]

What is his income. Look at the carryover worksheet, he might not have used any of the carryover this year.

[TAXBILLY]

Client has long term capital loss carry-over. I realized, after completing the return, that the Sch D was showing the carry-over to be the same as the 2009 carry-over. That can't happen because he is no longer day trading or anything else with the stock market, this is strictly carry-over loss. I checked to see if the Sch D is current, doesn't look like it. Has anyone else run into this or is it just me messing up somewhere. MM

Did he have taxable income the previous year?

taxbilly

[MargaretMort]

I am sorry, I left out important information. The tax return is, basically, very simple, interest, retired pay (2), and the long term capital loss carryover. The amount carried over from last year is correct. My question is really about the fact that when I went to print the carryover sheet, it showed the same figures that were printed last year. In other words, it didn't deduct the $3000 from this year. I certainly am capable of keeping a running record of the carry-over, it just confused me when this showed up.

Thanks for your help. It isn't a big deal, yesterday was my day for looking at things from the wrong perspective and being confused. MM

[Kea]

I think their answer to your question then stays about the same, except that it applies to the 2010 tax return.

Without the capital loss carry forward: would you client have had any taxable income? If after the deductions and personal exemptions, they had no taxable income, then they really aren't "using" any of the $3000 capital loss -- even though it is still on the front of the 1040. It that case, it doesn't reduce the carry forward to 2011.

I had this a couple of years ago, and it confused me at first, too.

Good Luck.

[MargaretMort]

No, they have taxable income. In fact, they owe more this year in taxes than recently. I had to compare last year's return to this year's to learn that though neither of the retired pay 1099s had COL increases, the withholding had gone down. They had more money in pocket and now owe more as a result. One of the retired incomes has received an adjustment statement informing him that the withholding will now more than double because the withholding tables have changed. Since I don't deal in payroll I wasn't aware of this, not that it makes any difference. At least I can now explain to the client the why behind it.

MM