TAP 106-013

Schedule D – Carry Forward Line

Issue Statement:

Taxpayers who have a capital loss carried over from the prior year need to include the amount of the carryover in the current year’s calculation of their capital loss or gain.  This entails getting a copy of the previous year’s Capital Loss Carryover Worksheet for the Schedule D, (Form 1040) Capital Gains and Losses.  Since the worksheet is not a part of the tax return but is in the instruction booklet, often the worksheet is not available for the next year’s calculation.

Goal Statement:

Have the prior year’s capital loss carryover information taxpayers readily available to taxpayers’ preparing their current year’s returns.

Proposal:

Add a line for “short-term capital loss carryover” and “long-term capital loss carryover” to the Schedule D.  The Taxpayer Advocacy Panel (TAP) suggests adding two lines to Part III, Summary section of the Schedule D as part of the current line 21.  The lines to be added would be line 21a, ”Short Term Capital Loss Carryover for 200X” and line 21b, “Long Term Capital Loss Carryover for 200X.”