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Can My Children Inherit My Carryover Losses? Let’s Discuss Capital Loss

Can My Children Inherit My Carryover Losses? Capital Loss - Eric Einhart Taxes are a part of life (and death) in the United States. If you earn sufficient income, then you must report that income and pay a tax on the income if it exceeds allowable deductions. One such deduction is a capital loss.

In the simplest sense, a capital loss occurs when you sell property (stock, personal property, real estate property, etc.) for less than it cost, or its basis. This loss can either offset capital gains in the year they are incurred or can be used as a deduction up to $3,000 against your ordinary income. If the capital loss is not used to offset your gains, and is greater than $3,000, then you can carry it over to the next year to either off-set gains derived in that year, or it can be used again as a deduction against your ordinary income up to $3,000.

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