Carryforward Loss Pause

[SensibleandHourly]

Good afternoon, 

If a client has a declared in 2023 of 14k that didn't 'help' as their income was already lower than the standard deduction. I'm looking at the IRS site and it seems that because this occurred in a year post 2020 that the carryover could have been 'paused' in 2023 and preserved for 2024? 

Thank you! Very much appreciate the knowledge of the group. 

Dawn 

[TaxGuyBill]

Yes, if their "taxable income" (line 15, but allowing it to go below zero) is negative $3000 or less, all of their capital losses are carried forward.

See page 11 of the Instructions for Schedule D.

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf#page=11

[SensibleandHourly]

HI there, 

Thank you very much for responding. I misrepresented this in my hurry while typing. The losses referenced are business income losses rather than capital losses. Now, I'm re-reading again...... Yikes. Apparently, I need more chocolate! 😉 

[SensibleandHourly]

Form 172?  

[Just-Lisa-Now-]

So its a Net Operating Loss?

[SensibleandHourly]

Yes, a Net Operating Loss. 

[Taxes-by-Rocky · Accepted solution]

Assuming 1040 return, look for the:  (i) Net Operating Loss Classification Worksheet; and (ii) the Net Operating Loss Worksheet both in the 2023 package and go from there.  You have to first determine if you had a net operating loss in 2023 and one that can be carried forward to 2024.  See IRS Publication as well.

[SensibleandHourly]

Thank you!!