in 2006 I bought stock and sold the stock in 2006 and lost $7,500. For my 2006 taxes I was only able to claim $3,000 and the other $4,500 was to be carried over for the following years. In 2007 say I made $4,500 from the stock market that was also short term stocks.......would that cancel out the $4,500 that was to be carried over from 2006 or only 3,000 dollars would be able to cancel out and I would have to pay $1,500 of capital gains tax for 2007.
========================================= MODERATOR'S COMMENT: Your entire capital loss carryforward is applied first to all gains, so all of the (4500) would be taken.