Three parts of the tax code shape an investor’s 2026 return: the $3,000 capital loss rule, the alternative minimum tax, and like-kind exchanges of real estate. Here are the rules from the IRS forms, and one investor’s year worked through with dates.
Capital losses offset capital gains first, and up to $3,000 of any net loss ($1,500 married filing separately) offsets other income; the rest carries forward with its short- or long-term character until it is used up (IRS Publication 550). A sale counts in the year of its trade date, not its settlement date, so December 31, 2026 is the last day to realize a 2026 loss. A wash sale disallows the loss if you buy substantially identical stock or securities within 30 days before or after the sale, including in your IRA or Roth IRA or through your spouse. The disallowed loss is added to the new shares’ basis, except for IRA purchases. The capital loss carryover calculator runs the Schedule D carryover worksheet for your numbers.
Form 6251 starts from taxable income and adds back items the regular tax allows but the AMT does not. For investors the common ones are the standard deduction or the state and local taxes from Schedule A (line 2a), interest from specified private activity bonds (line 2g), and the bargain element when incentive stock options are exercised and the shares are kept (line 2i). The bargain element is only the spread on the exercise date; before exercise an option is also worth time value, which a model such as Black-Scholes estimates (in Hull’s textbook example, a 6-month $40 call on a $42 stock is worth $4.76, of which $2 is intrinsic; see the Black-Scholes calculator). Rev. Proc. 2025-32 sets the 2026 figures:
| 2026 AMT amount | Single | Married filing jointly | Married filing separately |
|---|---|---|---|
| Exemption | $90,100 | $140,200 | $70,100 |
| Exemption begins to phase out at | $500,000 | $1,000,000 | $500,000 |
| Exemption fully phased out at | $680,200 | $1,280,400 | $640,200 |
| 28% rate applies above (income after exemption) | $244,500 | $244,500 | $122,250 |
Below the 28% threshold, the tentative minimum tax is 26% of AMT income after the exemption; above it, 28% minus 2% of the threshold. You owe AMT only if the tentative minimum tax exceeds your regular tax. Model your own return with the AMT calculator.
Section 1031 defers gain when investment or business real property is exchanged for other real property. Gain is taxed only to the extent of boot: cash, other property and net mortgage relief, less exchange expenses. The replacement must be identified within 45 days of the sale and received within 180 days or by the return due date including extensions, whichever is earlier. The 1031 exchange calculator follows Form 8824 lines 15 to 25 and shows both deadlines.
Dana files single. Her other taxable income is $183,000. In 2026 she has an $8,000 short-term stock gain, holds a fund with a $14,000 long-term loss, exercised and kept incentive stock options with a $60,000 bargain element, and is selling a rental to buy a larger one.
Harvest. Selling the fund on December 15 nets the $8,000 gain against the $14,000 loss for a $6,000 net loss: $3,000 is deducted and $3,000 carries to 2027 as long-term loss. Taxable income falls from $191,000 to $180,000, and regular tax from $38,438 to $35,798, $2,640 less.
AMT. AMT income adds back the $16,100 standard deduction and the $60,000 option bargain element: $180,000 + $16,100 + $60,000 = $256,100. After the $90,100 exemption, 26% gives a tentative minimum tax of $43,160, so she owes AMT of $7,362 on top of $35,798. Because she is in AMT, the harvest is worth 26% of the $11,000 drop in income: without it her tentative minimum tax would be $46,020, so total tax falls by $2,860 rather than $2,640.
Exchange. The rental closes on November 2, 2026, with a $400,000 basis, a $300,000 mortgage and $20,000 of costs, into a $1,100,000 property with a $500,000 mortgage. No boot, so the $480,000 gain is deferred and the new basis is $620,000. Day 45 is December 17, 2026; day 180 is May 1, 2027, after the April 15 due date, so she files an extension.
| Date | Action |
|---|---|
| Monday, November 2, 2026 | Rental sale closes; the 1031 clock starts (qualified intermediary holds the proceeds) |
| Sunday, November 15, 2026 | From here, buying the same fund would make a December 15 loss sale a wash sale |
| Tuesday, December 15, 2026 | Sell the losing fund (trade date); do not rebuy it or a substantially identical fund through January 14 |
| Thursday, December 17, 2026 | Day 45: written identification of the replacement property due |
| Thursday, December 31, 2026 | Last trade date for 2026 gains and losses |
| Thursday, January 14, 2027 | Wash-sale window for the December 15 sale ends |
| Friday, January 15, 2027 | Fourth-quarter 2026 estimated tax payment due |
| Thursday, April 15, 2027 | 2026 return due; file an extension to keep the full 180 days for the exchange |
| Saturday, May 1, 2027 | Day 180: replacement property must be received (with an extension) |
The example ignores state tax, net investment income tax, the minimum tax credit (Form 8801) that can follow a year of AMT, and depreciation recapture inside the exchange. Each of these can change the answer for a real return; an investor with options, rentals and losses in the same year should have a CPA or enrolled agent run Form 6251 and Form 8824 before year-end.
December 31, 2026. A sale counts in the year of its trade date, not the settlement date.
30 days before and 30 days after the loss sale. For a sale on December 15, 2026, that runs from November 15, 2026 through January 14, 2027.
$90,100 for single filers, $140,200 for married filing jointly and $70,100 for married filing separately, per Rev. Proc. 2025-32.
It starts to phase out at $500,000 of AMT income for single and separate filers and $1,000,000 for joint filers, and is gone at $680,200 and $1,280,400.
Identify the replacement within 45 days of the sale and receive it within 180 days or by your return due date including extensions, whichever comes first.
Capital losses lower taxable income, which is where Form 6251 starts, so they lower AMT income too; in the worked example the harvest saved 26% of the $11,000 drop.