Why aren't my short term capital losses offsetting capital gains on my NJ return?

tomsc
tomsc Member Posts: 1 Newcomer
in State Filing

I have short-term capital losses from stock sales in 2025. I also have Section 1250 depreciation recapture that exceeds the capital loss. On Schedule D Form 1040 of my federal return, the loss has reduced my total Section 1250 capital gain and reported the net gain. However, on my New Jersey summary, the loss is not netting off and the total gain is reported despite this being permitted in New Jersey. Is this a software error, or am I doing something wrong?

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 863 image
    Hi tomsc,

    To confirm what you are saying, I did a test account in FreeTaxUSA and found that the Net Gain from the disposition of property is being carried over correctly from the Federal Return to the NJ return. Here is how you can check your returns on your account.

    1. Go to the federal Summary page and download your federal Form 1040
    2. View line 16 of the Schedule D, part III (page 2)
    3. Return to the NJ Tax Summary page and compare that amount to the line "Capital Gains".

    Let us know if they match. If you have any more questions, you may want to contact Customer Support while signed into your FreeTaxUSA tax account so a support agent can take a look at your account.

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