What does Capital Loss Carryovers on your taxes mean?

You can use your total net loss to reduce your income by up to $3,000. You can carryover the unused part to the next year and treat it as if you had incurred in that next year.

When you carry over a loss, it remains long term or short term. A long term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. When you are figuring your capital loss carryover, use your short-term capital losses first.
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