When filing income taxes, what to do if the loss is greater then the total annual income?

Question

Can you still write off the loss, if it exceeds the total annual income?

Answer 1

Most likely it will be carried over to next year.

Answer 2

Not so fast here. If you have capital losses that exceed capital gains, you can write off all losses that cancel capital gains and up to $3,000 additional. The remaining losses are carry-overs to the next tax year.

  

Answer 3

That depends on what the nature of the loss and Income is.  In some cases you will reduce gross income to something near zero.  In some cases you can carry over losses to future years.

Answer 4

It depends what caused the loss.  

Some losses are postponed, others create an Net Operating Loss (which can be carried to other years.)

New info is the that this is a schedule D transaction.  First you net the loss against other gains.  As another poster has said, the max you can take against ordinary income this year is $3000.  Any remaining amount is carried forward to the next tax year.

(While the saying is $3000/year, let's say you lost $30,000.  You claim $3000 this year and carry $27,000 to next year.  Next year you sell something for a gain of $10,000.  You'd use up $13,000 next year.  $10K to knock out the gain and $3000 against ordinary income and then $14000 carries forward.)

Answer 5

You report the sale of the land on Schedule D.  If you have capital gains, those gains will be offset by part of the loss.  In addition, you can take a maximum of $3,000 of the loss against your other income.

Any leftover loss will be carried forward to the next year, where you will proceed as you did the first year.  

For more details, see IRS Pub 550 Investment Income and Expenses.

http://www.irs.gov/pub/irs-pdf/p550.pdf