Is there a benefit to writting off Long-Term Capital loses vs Short-Term? (income, $40,000)

[UntilTheNDofTimE]

I was just completing my father's taxes and have a question about writing off Long-Term vs Short-Term Capital loses for the $3,000 annual maximum. My father had around $40,000 in loss carryovers from 3-4 years ago. He no longer has a taxable account so he'll receive a $3,000 write off for the next 15 years or so. I'm doing his taxes for the first time so I took a look at how his tax guy did his schedule D for the past 3 years.

Let's just assume in 2010 that his loss carryovers were $35k short-term, and $5k long term. According to the schedule D the only amount that changed the last 4 years was the short-term. So in this example it would now be 23k and 5k respectively. Is there a benefit to always writing off the short term cap losses? When i entered his carry over information into FreeTaxUSA it didn't even ask which type of losses I wanted to write off. Is it a default to always write off the short-term?

Thanks

[mathjak107]

long term losses have to offset long term gainsfirst . then they go towards short term and finally just 3k if no gains.

[Jeo123]

Originally Posted by UntilTheNDofTimE

I was just completing my father's taxes and have a question about writing off Long-Term vs Short-Term Capital loses for the $3,000 annual maximum. My father had around $40,000 in loss carryovers from 3-4 years ago. He no longer has a taxable account so he'll receive a $3,000 write off for the next 15 years or so. I'm doing his taxes for the first time so I took a look at how his tax guy did his schedule D for the past 3 years.

Let's just assume in 2010 that his loss carryovers were $35k short-term, and $5k long term. According to the schedule D the only amount that changed the last 4 years was the short-term. So in this example it would now be 23k and 5k respectively. Is there a benefit to always writing off the short term cap losses? When i entered his carry over information into FreeTaxUSA it didn't even ask which type of losses I wanted to write off. Is it a default to always write off the short-term?

Thanks

Mathjak's already answered you about the prioritization, but as for which one is better, short term gains are usually taxed at a higher rate(your standard income rate) so the deduction there is more valuable. That said, you don't get to choose which one you offset.

[lchoro]

You don't have a choice. You have to go through the short-term capital loss carryovers first.