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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
Money you lose when you sell an investment for less than you paid.
Why It Matters
Losses hurt, but they have a silver lining: tax benefits. You can use capital losses to offset your gains dollar-for-dollar, and even deduct up to $3,000 per year against regular income. Smart investors use 'tax-loss harvesting' to strategically sell losing positions to reduce their tax bill while staying invested in similar assets.
Key Points
- Capital losses offset capital gains first, then you can deduct up to $3,000 from regular income
- Unused losses carry forward to future years - no expiration
- Watch the 'wash sale' rule: can't buy the same or similar stock within 30 days and still claim the loss
Related Terms
Common Questions
Money you lose when you sell an investment for less than you paid. Losses hurt, but they have a silver lining: tax benefits. You can use capital losses to offset your gains dollar-for-dollar, and even deduct up to $3,000 per year against regular income.
Losses hurt, but they have a silver lining: tax benefits. You can use capital losses to offset your gains dollar-for-dollar, and even deduct up to $3,000 per year against regular income. Smart investors use 'tax-loss harvesting' to strategically sell losing positions to reduce their tax bill while staying invested in similar assets.
Capital losses offset capital gains first, then you can deduct up to $3,000 from regular income
Unused losses carry forward to future years - no expiration
Watch the 'wash sale' rule: can't buy the same or similar stock within 30 days and still claim the loss