Can I choose to offset ST gain first if I have carryover?

Question

I have about $10,000 loss carried over and ST gain of $8000 and LT gain of $12,000. Which part of the gain will be offset? Can I choose to offset all ST gain ($8000) first and then $2000 of the LT gain, leaving $10,000 of LT gain as net?

Hi v b, thanks for answering my question again. The carryover is from the ESPP situation I menationed in my earlier question: (btw, it was really ESPP, in a non-qualifying disposition; the diff was huge because I had a low low purchase price locked in for 2 years). After paying taxes for the phantom income in the year sold, I now can file a capital loss from it. Would it be long-term or short-term in this case?

Answer 1

You follow the form.

Your loss carryover is either ST or LT. If it's ST, it offsets ST gain first. If it's LT, it offsets LT gain first. *You* don't get to choose. (If you could, everyone would offset ST first to lower their tax bill.)

Answer 2

Your carryover is either ST or LT - a ST carryover will first offset a ST gain; a LT carryover will first offset a LT gain. Download schedule D and look at it to see how it works.