Yes, but there are limits. The IRS allows you to deduct up to $3,000 in capital losses from your ordinary income each year—or $1,500 if you're married and filing separately. Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.
For example, if you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary and interest income.
See additional guidance below:
How to deduct Capital Loss
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