A capital loss carryover worksheet is a tax form used to calculate the amount of capital losses that can be carried over to future tax years. Capital losses occur when an investor sells an asset for less than they paid for it. These losses can be used to offset capital gains, which are profits from the sale of assets. If the capital losses exceed the capital gains in a given year, the excess losses can be carried over to future years and used to offset future capital gains.
The capital loss carryover worksheet is an important tool for investors who have experienced capital losses. It allows them to reduce their tax liability by carrying over the losses to future years. This can result in significant tax savings over time. The worksheet is also used by the Internal Revenue Service (IRS) to verify the amount of capital losses that can be carried over.
