Offset Some Capital Gains With Capital Losses

To determine if you have a capital gain or capital loss, you must know the tax basis of the asset you sold. If you are unsure of your tax basis, refer to IRS Publication 551, Basis of Assets.
You fully deduct capital losses against capital gains on Form 1040, Schedule D. If capital losses exceed capital gains you can deduct the excess on your tax return as follows. Your allowable capital loss tax deduction on your tax return for any tax year, figured on Form 1040, Schedule D, is limited to the lesser of:
$3,000 ($1,500 if you are married and file a separate tax return), or
Your capital loss as shown on Form 1040, line 18 of Schedule D.
If you have a capital loss on Form 1040, line 18 of Schedule D that is more than the yearly limit on capital loss tax deductions, you can carry over the unused part of the tax deductible capital loss to later tax years until it is completely used up.

If your capital losses exceed your capital gains, the excess is subtracted from other income on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately).

Capital losses can also be carried over. If net long-term capital loss exceeds net short-term capital gain, the excess becomes long-term capital loss in the following year. If net short-term capital loss exceeds net long-term capital gain, the excess becomes short-term capital loss in the following year.

A capital loss that is not deductible in the current year because it exceeds the annual capital loss ceiling, but may be deductible in future years. In general, only $3000 in capital losses can be claimed in any one year, but the excess loss can be carried over indefinitely. also called loss carryover.