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If I incurred a loss of $50,000 in 2007 and in 2008 incurred a capital gain of $20,000 can I carry over the loss of 2007 and subtract the $20,000 gain leaving me no capital gains to be taxed and still carry a $30,000 loss to be carried over into future years?

In general principle, that's how it works. Your specific numbers are unlikely. If you wind up with a net loss on your 2007 Schedule D $3,000 is taken on your 2007 return with the excess carried forward to your 2008 Schedule D. You can see how it works on Schedule D of the 1040.

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