I had a ST capital losses of over $10,000 split between 2000 and 2001, but I never reported them (or any trading activity) since it wouldn't have affected my taxes much in college and my mom was afraid that the financial aid office would decide to take my scholarships away because of it. Now that I've graduated, I want to start capturing those losses against my taxes ($3K per year & offsetting future profits until they're gone). What should I do tax-wise for 2003? Do I need to refile for those years, or could I put those trades on my 1041D this year (even though the dates are in 00-01)? Thanks, -Chris.
Even though I'm a CPA, I don't specialize in taxes. But I would say you must refile the returns. You can deduct up to $3k in losses a year (less if your reported income would go below zero) and carry it forward each year until it's used up. No limit as to how many years forward you can go. You won't be able to arbitrarily shift a 2000/2001 loss to a different year when you're in a higher tax bracket.
You must amend your returns. You can't voluntarily skip years and apply the loss at a later time. Once the returns are amended, if there is still a carryover, of course you can then take it.