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How to trigger recognition of capital loss carryover on a deceased taxpayer final return

YTG
Level 1

My client passed in 2024.  Her 2023 return had a capital loss carryover.   When preparing her 2024 (final) return, Proconnect is only recognizing the usual $3k (limited) capital loss carryover..  Client death date has been entered and Proconnect reports the date of death on the face of the 1040.  But, doesn't trigger the full capital loss carryforward recognition on schedule D?

Thanks

 

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1 Comment 1
Quack_Shot
Level 3
Level 3

It should be offsetting any capital gains and then the $3,000 of ordinary income. Any remaining capital loss is expired and can't be carried over to the estate or anyone else. 

See Rev. Rul. 74-175, 1974-1 C.B. 52.

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