Updated October 18, 2026. Quick answer: Line 6 is your short-term capital loss carryover from last year, taken from the Capital Loss Carryover Worksheet in the instructions. Line 7 combines lines 1a through 6 in column (h) to give your net short-term gain or loss for the year. The line asks for the amount, if any, so a year with no carryover has nothing to enter on line 6.
IRS worksheets read line by line: Capital Loss Carryover Worksheet.
What lines 6 and 7 ask for
Line 6 is captioned “Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions”. Line 7 is captioned “Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h).” They close out Part I of Schedule D (Form 1040). The instructions list this among the reasons for Schedule D: “To report a capital loss carryover from 2024 to 2025.”
Where the number comes from: line 6
The number comes from the worksheet in the instructions named “Capital Loss Carryover Worksheet”. The worksheet explains who needs it: “Use this worksheet to figure your capital loss carryovers from 2024 to 2025 if your 2024 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2024 Schedule D, line 16; or (b) if the amount on your 2024 Form 1040, 1040-SR or 1040-NR, line 15 would be less than zero if you could enter a negative amount on that line.” It also says when you can stop: “Otherwise, you don’t have any carryovers.” The worksheet’s own line math is not repeated here; use the worksheet in the instructions and your 2024 return.
One rule for couples: “If you and your spouse once filed a joint return and are filing separate returns for 2025, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss.” The same worksheet also feeds the long-term carryover on line 14, which is covered at Schedule D lines 13 to 15.
Where the number comes from: line 7
The form says to combine lines 1a through 6 in column (h). Lines 1a through 5 come from the pages at Schedule D line 1a, Schedule D lines 1b, 2 and 3 and Schedule D lines 4 and 5.
A computed illustration, not an IRS example: suppose line 1a column (h) is $900, line 1b column (h) is a loss of ($250), and line 6 is a carryover loss of ($150). Combining them gives $900 minus $250 minus $150, which is $500 on line 7.
Where it goes next
The form tells you what to do with line 7 right on the line: “If you have any long-term capital gains or losses, go to Part II below.” The line also says “Otherwise, go to Part III on the back”. Line 7 and the Part II result on line 15 are then combined on line 16, which is covered with the both gains test at Schedule D lines 16 and 17.
Looking ahead, the instructions say how to track a carryover into next year: “You will need a copy of your 2025 Form 1040 or 1040-SR and Schedule D to figure your capital loss carryover to 2026.”
Edition and line numbers
This page reads the 2025 Schedule D (Form 1040) and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are byte-identical to the archived copies and they are the files for the tax year 2025 return, filed in 2026. The schedule says “Attach to Form 1040, 1040-SR, or 1040-NR.” Schedule D has its own instructions booklet, titled “Instructions for Schedule D (Form 1040)”. Check the tax year printed on the schedule you are filling in and use the line numbers on that year’s schedule, because a different year’s schedule can number or word its lines differently.
Common mistakes
- Entering a carryover when the worksheet says there is none. The worksheet says “Otherwise, you don’t have any carryovers.”
- Using the joint-return carryover on the wrong separate return. The instructions say it “can be deducted only on the return of the spouse who actually had the loss.”
- Forgetting that line 7 includes line 6. The caption says “Combine lines 1a through 6 in column (h).”
Related: Schedule D (Form 1040), capital loss harvest helper, Form 1040 line 7, and Schedule K-1 (Form 1041) box 11 codes C and D.
Sources
- Instructions for Schedule D (Form 1040), Capital Gains and Losses (2025): https://www.irs.gov/pub/irs-pdf/i1040sd.pdf
- Schedule D (Form 1040), Capital Gains and Losses (2025): https://www.irs.gov/pub/irs-pdf/f1040sd.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.