Capital Loss Carryover Law and Legal Definition
The term capital loss means a loss incurred when a capital asset (investment or real estate) diminishes in value. Generally, such amount of capital loss is not permitted to deduct from the total income in the current tax year and carried over to the future tax years. The net capital losses mean total capital losses minus total capital gains. The permitted deduction is limited to a maximum of $3,000 in a tax year. The excess amount in the net capital losses are carried over to the next tax year(s).
