Have a question about carryover short term vs long term capital loss

I finally took a loss with a penny stock that I held over the last 7 years. So here is my "hypothetical" situation: I will have a 30K long term capital LOSS showing on my 2007
return I will have a 10K short term capital GAIN showing on my 2007 return Will the -30K + 10K = to -20K cary over for next year?
Or is it not possible to offset any long term LOSS towards any short term GAIN? Thanks for the feedback...
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snipped-for-privacy@verizon.net (MichaelB.) posted:

You will find that, as the Schedule D reporting of capital gains is worked through, there comes a point where you are directed to _combine_ the results of the short- and long-term sections. That _combining_ will result in your long-term loss offsetting the smaller, short-term gain. The remaining long-term loss will be carried forward (and you should take care to make special note, so it is "remembered" when the next year's return is prepared). As the long-term loss carryover is worked down -- with at least $3,000 useable each year, even against ordinary income -- it may offset either/or short- and long-term gains. If, however, at some point the loss carryover is _less_ than either the long-term or the combined short- and long-term gains, then it will be used _first_ to reduce the long-term gain. Therefore, similar tax-advantaged income is the first offset. Bill
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Michael B. wrote:

Close. If the above is all you have, the $20K loss is taken as $3K against ordinary income (!) and $17K is carried forward. The sequence is to first net long term losses again long term gains, then short against stort, then netting what remains as I did above. The $17K loss, if you have no further gains will be used up as $3K per year against ordinary income until it's used up. JOE www.blog.joetaxpayer.com
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You also get to use 3K against ordinary income this year, so 17K loss carries forward. Seth
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Almost. Those two will net to a $20K *long-term* loss. Then $3K of that will be taken against your ordinary income (no choice), leaving a $17K *long-term* carryover to next year. -- Rich Carreiro snipped-for-privacy@rlcarr.com
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You must enter these transactions on Shedule D and take $3,000 of the loss on 1040line 13. Then the remaining $17,000 carries over on the Capital Loss Carryover Worksheet. Yes, your long term loss will offset short term gains if there are no other gains or losses involved. ed
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Thank you all for the answers! Much appreciated!
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