Capital losses, short-term or long-term, can only be deducted from capital gains. The net gain (after deducting losses) is subject to a lower tax rate on long-term gains if the asset was held at least 12 months before being sold.
Net short-term gains are taxed at ordinary income tax rates, which depend on your income tax bracket (higher taxable incomes face higher marginal rates on added income).
If capital losses exceed realized gains (on assets sold that year), the excess unused capital loss can be carried forward indefinitely and used in future years to offset future gains.
