Trading carryover loss?

Question

I had the stock trading gain last year. And I had the trading carryover loss before. I wonder if I can take some partial carryover loss and carry forward the rest. If I take all the loss, I'll hit the AMT. If possible, which IRS form will be used to keep track of any unused carryover loss?

Answer 1

You need to take the carryover loss, sorry. Maybe you can remove other deductions that trigger AMT, such as unreimbursed employee expenses. You don't have to deduct those.

There is a worksheet to compute the carryover in IRS Pub 550.

http://www.irs.gov/pub/irs-pdf/p550.pdf

Answer 2

You'd have to take all usable carryover loss, which would be whatever would net out your gains for the year, plus $3000 against ordinary income - or else subtract that amount from your carryover - it's use it or lose it. You'd have to decide which would save you the most in taxes. There's no law that says you actually have to take your carryover, but if you don't, you do have to subtract what you could have taken, from the carryover to the following year.

Answer 3

You MUST use any carryover loss from prior years to offset gains in the current year. If that triggers an AMT event, so be it -- and sorry to hear that.