If you have more capital losses than capital gains in previous years, part of those losses may be carried over to your 2025 tax return. Check Line 16 on Schedule D of your 2024 tax return. If Line 16 on Schedule D shows a loss, you could have a capital loss carryover to 2025. To calculate the amount of the carryover and whether it's short-term or long-term, use the Capital Loss Carryover Worksheet found in the 2025 Schedule D instructions.
You can generally deduct up to $3,000 of net capital losses each year on Form 1040, or up to $1,500 if you are Married Filing Separately. Any unused losses can be carried forward to future tax returns until they are fully used.
You may also have a carryover if your taxable income was zero last year. Because the capital loss did not reduce your tax liability, the unused portion may carry over to your 2025 return.
