Carryovers on your prior return that can affect year-end planning

Hi guys, this is Noel Dalmacio, your ultimate CPA at
Today, we’re going to talk about carryovers on your prior return that can affect year-end planning.

As the year-end is coming to a close, remember to check your prior tax return for carryover items that can affect your year-end planning. Here are four items to look out for:
1. Capital loss carryover. If your capital losses were more than your capital gains last year, you may be able to carryover any unused loss to future years. You can apply the loss against this year’s capital gains as well as up to $3,000 of other income – a benefit to remember when you’re rebalancing your portfolio over the next few months.
Here’s a tip: Keep track of your capital loss carryforward for alternative minimum tax planning and projections. In some cases, this amount can be different from the carryforward calculated for your regular income tax.
2. Passive loss carryover. If you are selling a rental property, did you know that you can release the suspended rental losses for that particular rental? So make sure your unused rental losses were carried forward correctly every year since this usually happens when you change tax preparers.
3. Charitable contribution carryover. Was your charitable donation deduction limited from prior years due to low income or business losses? If so, you may have a carryover that you can use if you’re going to itemize on this year’s taxes.
Here’s a tip: Take this carryover into account when planning this year’s donations so you don’t lose the benefit of older unused amounts. Why is that important? Because charitable contribution carryforwards only have a five-year life.
And the last one:
4. Net operating loss carryover. If your business had a loss last year, you had to make an election to carry the entire loss forward to the current year. Otherwise, the general rule of carrying the net operating loss back two years applies, with the remainder carried forward 20 years.

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Until then, this is Noel Dalmacio, your ultimate CPA at

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Noel Dalmacio, CPA, CFP, MS TAX
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Irvine, CA 92606

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