TaxGuru,

Can I carry forward my capital losses indefinitely?

Dear PaulChamil,

Yes, you can carry those losses forward indefinitely, except for the annual $3,000 loss deductions that you are entitled by the tax code, thus, the total balance of accumulated losses are reduced by this amount.

If, however, you incur capital gains in future years, these accumulated loss carryover would be further reduced by these capital gains.

Question... what happens if the following year there's no income, is the carryover loss still gets reduced? example. carrying over 4000 losses from prior year and this year has no income to offset, what will be the balance of the capital loss for the following year...will it be still 4,000 or 1,000? the 3,000 is wasted due to no income in the current year?

Another question is... if a child have a capital loss from investment, could the child file her return with the parent?

Thanks...I tried to research this and I am still confused.