Do capital loss carryforwards keep their short-term or long-term character?

Yes. When you carry an unused capital loss into future years, it retains its original classification: a short-term loss carries forward as short-term, and a long-term loss as long-term. This matters because of the netting rules. In the new year, the carried-forward short-term loss first offsets any short-term gains (which are taxed at high ordinary rates), and the long-term carryforward offsets long-term gains. Preserving the character means your banked losses keep attacking the most heavily taxed gains first. You track carryforwards on Schedule D and the associated Capital Loss Carryover Worksheet. Keep good records year to year, because tax software can drop a carryforward if you switch programs, and forgetting it means leaving deductions on the table.