<jats:title>Abstract</jats:title><jats:p>Erosion of permafrost coasts due to climate warming releases large quantities of organic carbon (OC) into the Arctic Ocean. While burial of permafrost OC in marine sediments potentially limits degradation, resuspension of sediments in the nearshore zone potentially enhances degradation and greenhouse gas production, adding to the “permafrost carbon feedback.” Recent studies, focusing on bulk sediments, suggest that permafrost OC derived from coastal erosion is predominantly deposited close to shore. However, bulk approaches disregard sorting processes in the coastal zone, which strongly influence the OC distribution and fate. We studied soils and sediments along a transect from the fast‐eroding shoreline of Herschel Island—<jats:italic>Qikiqtaruk</jats:italic> (Yukon, Canada) to a depositional basin offshore. Sample material was fractionated by density (1.8 g cm<jats:sup>−3</jats:sup>) and size (63 μm), separating loose OC from mineral‐associated OC. Each fraction was analyzed for element content (TOC, TN), carbon isotopes (δ<jats:sup>13</jats:sup>C, Δ<jats:sup>14</jats:sup>C), molecular biomarkers (<jats:italic>n</jats:italic>‐alkanes, <jats:italic>n</jats:italic>‐alkanoic acids, lignin phenols, cutin acids), and mineral surface area. The OC partitioning between fractions changes considerably along the transect, highlighting the importance of hydrodynamic sorting in the nearshore zone. Additionally, OC and biomarker loadings decrease along the land‐ocean transect, indicating significant loss of OC during transport. However, molecular proxies for degradation show contrasting trends, suggesting that OC losses are not always well reflected in its degradation state. This study, using fraction partitioning that crosses land‐ocean boundaries in a way not done before, aids to disentangle sorting processes from degradation patterns, and provides quantitative insight into losses of thawed and eroded permafrost OC.</jats:p>