So basically I made very dumb “investing” decisions, and ended up losing $50k in the past two years in capital losses. I learned however that one can carry over these losses, and that you can deduct 3k each year off ordinary income if you don’t have capital gains each year until the carried over losses are depleted.
However, I’m confused why someone would want to deduct the 3k? Let’s say you’re in the 24% tax bracket. Doesn’t that mean come tax season, you only get $720 back vs the $3k you ended up losing?
Wouldn’t it be better to not deduct the 3k, and leave the 50k capital losses as is, so that one day in the far future when I make $50k+ in capital gains (through let’s say index fund investing for decades), I can essentially get $50k tax free? Isn’t this better than getting back a measly $720 each year from a deduction in ordinary income?
Also is it possible to opt out of the deduction when filing the Schedule D to leave the capital losses as is, or does it automatically deduct the 3k no matter what?
Sorry in advance if my post sounds stupid, just trying to wrap my head around this.
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