Topic No. 409, Capital gains and losses
IRS · checked 2026-10-04
The app uses the figures and rules named on that page. It does not replace the page.
business · official figure · reviewed 2026-10-04
Cap a Net Capital Loss at the $3,000 Limit
A net capital loss is not fully deductible in the year of the sale. The federal cap is $3,000, or $1,500 if you file separately.
What this guide helps you do
Apply the annual capital-loss deduction cap and show the carryforward.
The figure that changes the result
The loss you cannot deduct this year carries forward. It is not erased.
Reading Schedule D instructions and doing the subtraction takes about 25 minutes, and the carryforward is easy to drop.
Who this is for
A person with investment gains and losses who needs the deductible amount and the carryforward.
Steps
Step 1
List investment sales. Leave out a loss on a personal home or a personal car.
Step 2
Add gains in one figure and losses in another.
Step 3
Choose the filing status. Separate filers use a $1,500 cap.
Step 4
Deduct the net loss up to the cap.
Step 5
Carry the rest forward. Use the worksheet in the Schedule D instructions.
Worked example
Gains of $2,000 and losses of $8,000 leave a net loss of $6,000. A single filer deducts $3,000 this year and carries $3,000 forward.
You can deduct $3,000.00 this year. Carry forward $3,000.00.
- Gains $2,000.00 minus losses $8,000.00 = net -$6,000.00.
- Annual cap: $3,000.00.
- Deductible this year: $3,000.00.
- Carryforward: $3,000.00.
The deductible net loss is the lesser of the net loss and $3,000.
Where this goes wrong
A loss on personal-use property is not deductible. If you include it, the tool stops. Do not use this tool for the 2025 capital-gain rate brackets. Those brackets are a different year.
What the source says
Limits
Gifted property, inherited property, and collectibles can use other rules.
The tool does not compute the tax rate on a net gain.
State tax rules can differ.
This tool gives general information. It is not financial or tax advice. Confirm the numbers with the provider or a licensed adviser before you act.
Use the current instruction from the agency named above. This guide is a planning aid, not an official decision.
Free companion app
Apply the annual capital-loss deduction cap and show the carryforward.
Open Cap the Deductible Capital Loss
Your entries stay on this device. We do not receive them.
This guide uses short, direct instructions as an ASD-STE100-style writing target. It is not a formal certification.