Capital losses can be carried forward only to offset capital gains (and up to $3,000 of ordinary income) in future years. The capital losses of a deceased spouse can be used on the final joint return, but the surviving spouse cannot carry the excess forward for used by the spouse in future years.
The tax on the investment income in excess of $1,700 (may change after 2007) of a child under age 18, based on the parents’ marginal tax rate and computed on Form 8615.