It’s not a loophole.
It is simply a matter of fairness to allow unlucky people to offset the losses of a bad year against income in future years.
The inability of some Democrats to understand the necessity of loss carryforwards is why those Democrats are not qualified to hold public office.
Loopholes are a rule allowed(voted) by congress as a perk to businesses that pay Lobbyists to pay the same politicians that pass the laws.
My tax accountant, since 1976, asked one question to my wife and me. “If there was a question of one dollar to the government or you keep it.” my wife replied, “ give it to the government”.
The accountant said “NEVER, make them prove it”.
She has never had a government audit any of her thousands of filings. She has over 300 clients. She vows to go with any client that is audited!