Definition of Loss Carry Forward

A capital loss realized on the sale of an asset in one year that is carried forward in whole or part to subsequent tax years.

Applying "Loss Carry Forward" to Securities Exams:

Tax laws allow investors to carry forward capital losses for an indefinite period of time, and capital losses can always be used to offset capital gains, dollar for dollar. However, if the investor has all losses and no gains, the investor can still write off $3,000 worth of losses against her ordinary income each year.
For example, if an investor realizes a capital loss of $18,000 and has no capital gains to offset it, she can write off $3,000 in loss against her ordinary income for 6 years.

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