# How to Determine Capital Loss From Stocks in the Short-Term Vs. Long-Term Carry Forward

If you've had a rough year selling stocks, tax relief is in sight. Not only can you use your losses to offset any gains, you can also take a limited tax deduction. In addition, you can carry forward the excess loss into future years when, hopefully, you will have more gains to offset. However, you need to keep track of how much you have in short-term losses and long-term losses, because the difference can change how much tax you owe.

## Identifying Short- and Long-Term Losses

Before you can calculate your short-term and long-term loss carry forwards, you have to distinguish between your short-term and long-term losses. A short-term loss is any loss on the sale of a stock you held for one year or less. A long-term loss is any loss on the sale of a stock you held for more than on year. When figuring your holding period, don't count the day you bought the stock but do count the day you sold it.

## Calculate Losses Separately

Calculate your net long-term loss separately from your net short-term loss. If you carry forward a loss, it keeps its character so you can't simply lump all your losses together. For example, if you have short-term losses of \$1,000 and \$3,000 and long-term losses of \$5,000 and \$4,000, but also a long-term gain of \$3,000, you have a net short-term loss of \$4,000 and a net long-term loss of \$6,000.