What happens to remaining capital losses after offsetting gains and the annual deduction limit?

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Multiple Choice

What happens to remaining capital losses after offsetting gains and the annual deduction limit?

When capital losses exceed your capital gains, the leftover losses aren’t wasted; they’re carried forward to future years. After you net gains and losses, you can deduct up to the annual limit against ordinary income. Any amount beyond that is carried forward to future years and can be used to offset gains (and, when possible, ordinary income) in those years. This carry-forward continues indefinitely until the losses are fully utilized. For example, if you have $10,000 in losses and $6,000 in gains, you net to a $4,000 loss; you can deduct up to the yearly limit (often $3,000 for individuals) now, and the remaining $1,000 would carry forward to next year, where it can again be used against gains or ordinary income up to the limit, continuing until it’s all used.

When capital losses exceed your capital gains, the leftover losses aren’t wasted; they’re carried forward to future years. After you net gains and losses, you can deduct up to the annual limit against ordinary income. Any amount beyond that is carried forward to future years and can be used to offset gains (and, when possible, ordinary income) in those years. This carry-forward continues indefinitely until the losses are fully utilized. For example, if you have $10,000 in losses and $6,000 in gains, you net to a $4,000 loss; you can deduct up to the yearly limit (often $3,000 for individuals) now, and the remaining $1,000 would carry forward to next year, where it can again be used against gains or ordinary income up to the limit, continuing until it’s all used.

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