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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Reply to
Michael B.
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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

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Reply to
joetaxpayer

You also get to use 3K against ordinary income this year, so

17K loss carries forward. Seth
Reply to
Seth

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

Reply to
Rich Carreiro

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

Reply to
ed

Thank you all for the answers! Much appreciated!

Reply to
Michael B.

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