Here’s a more general question, related to my original Q:
I might be in a situation where I’m filing a return unnecessarily.
I’m filing only because I had a very small capital gain resulting from a mutual fund company selling fractional shares in three funds to cover $20 in annual expenses for each of the three funds.
My understanding is that one must file a return if there are any capital gains at all.
For example, some years ago I sold fund shares totalling $20,000. Only about $2,000 of the gross $20,000 received was capital gains. I did all the worksheets, and the result was I owed no tax, so I didn’t file. A few yrs later, I recvd an IRS letter asking why I didn’t file. The IRS received ONLY the info that I had received $20,000 gross–they had NO info re basis, hence no knowledge of how much of the $20k was cap gains. So they thought I’d had a clear $20,000 that I didn’t report.
So I’ve been filing every year, even though owing no tax, if I have even small cap gains, ie this year under $20.
[I know that as of this year, the IRS is receiving basis info from fund companies for shares purchased after 01/01/2012.]
So I’m wondering: Do I even need to file? If not, what would happen to the capital loss carryover amount I still have? Do I need to file to keep this carryover “alive”?