U.S. · Tax forms
Schedule D line 21, the capital loss limit.
The $3,000 cap, where the loss goes, and what carries over to 2026.
Line 21 applies only if line 16 is a loss. Enter the smaller of the loss or $3,000 ($1,500 if married filing separately) as a loss here and on Form 1040 line 7a. Treat both amounts as positive numbers to compare. Any excess may carry over to 2026.
Look up a Schedule D line
Result
Schedule D line 21 on the 2025 form
The 2025 form prints this line as: “If line 16 is a loss, enter here and on Form 1040, 1040-SR, or 1040-NR, line 7a, the smaller of: the loss on line 16; or ($3,000), or if married filing separately, ($1,500). Note: When figuring which amount is smaller, treat both amounts as positive numbers.”
| Line | Meaning | What the IRS says |
|---|---|---|
| Line 7 | Net short-term capital gain or (loss) | Combine lines 1a through 6 in column (h) |
| Line 15 | Net long-term capital gain or (loss) | Combine lines 8a through 14 in column (h) |
| Line 16 | Combine lines 7 and 15 | A loss means skip lines 17 through 20 and go to line 21 |
| Line 21 | Smaller of the loss or the limit | ($3,000), or ($1,500) if married filing separately. Enter here and on Form 1040 line 7a |
| Line 22 | Qualified dividends on line 3a? | Yes: Qualified Dividends and Capital Gain Tax Worksheet. No: finish the return |
| Carryover test 1 | Loss on line 16 over loss on line 21 | Gives a capital loss carryover from 2025 to 2026 |
| Carryover test 2 | Form 1040 line 15 would be below zero | Also gives a carryover |
| Worksheet | Capital Loss Carryover Worksheet | Lines 6 and 14 come from it. For 2025 to 2026 use the 2026 Schedule D instructions |
The limit
The instructions say you can deduct capital losses up to the amount of your capital gains plus $3,000 ($1,500 if married filing separately), and you may be able to use losses over that limit in future years. Report all your capital gains and losses even if you cannot use all your losses in 2025. On the form, line 21 is the smaller of the line 16 loss or the limit, with both treated as positive numbers for the comparison.
The carryover
You have a capital loss carryover from 2025 to 2026 if line 16 is a loss and either that loss is more than the loss on line 21, or the amount on Form 1040 line 15 would be less than zero if you could enter a negative number there. To figure the carryover use the Capital Loss Carryover Worksheet in the 2026 Instructions for Schedule D (Pub. 550 if you want to compute it now). You need your 2025 Form 1040 and Schedule D to do so.
Worked example
Noor (made-up, single) has line 7 of ($5,000) and line 15 of ($2,000), so line 16 is ($7,000). The limit is $3,000, so line 21 is ($3,000), entered on Form 1040 line 7a. The $4,000 above the limit is the starting point for her carryover, but the actual figure comes from the carryover worksheet, because taxable income can reduce it.
Related pages
The line 16 page covers the combination that gets you here, and the tax-loss harvesting calculator linked below models what a loss offsets.
More Schedule D line pages
Other pages in this set: Schedule D line 13, Schedule D line 15, Schedule D line 16, Schedule D line 18, Schedule D line 19.
Sources
- Instructions for Schedule D (Form 1040) (2025): the line-by-line instructions on this page. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Schedule D (Form 1040) 2025: the printed line wording and arithmetic on the form. Read November 2, 2026.
Tax year 2025 edition (returns filed in 2026). Line numbers, dollar limits and wording are those printed in the 2025 form and instructions and change by year. Names in worked examples are made up.
Frequently asked questions
What is Schedule D line 21?
The capital loss you can claim for the year: the smaller of the line 16 loss or $3,000 ($1,500 if married filing separately).
Where does the line 21 amount go?
On Schedule D line 21 and on Form 1040, 1040-SR or 1040-NR, line 7a, as a loss.
What happens to a loss over $3,000?
It may carry over to 2026. Use the Capital Loss Carryover Worksheet in the 2026 Instructions for Schedule D.
Can taxable income affect the carryover?
Yes. The instructions say a carryover also arises if Form 1040 line 15 would be less than zero if you could enter a negative amount.
Does the limit change for married filing separately?
Yes. The limit is $1,500 instead of $3,000.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.