Apparently, it's possible that capital loss carried over from prior year may not be reduced by this year's amount on line 13 (Form 1040), and that the reduction depends on the tax benefit from the capital loss, because the tax law requires the taxpayer to use a capital loss before being allowed to use his personal exemption. I understand that this depends on the amount on line 41 (Form 1040). Can someone explain how this work? How is the "tax benefit" calculated? Can you give me an example?