The rules for capital losses are as follows:
To figure your total net gain or loss, combine your net short-term capital gain or loss with your net long-term capital gain or loss.
If your capital losses are more than your capital gains, you can claim a capital loss deduction. The maximum deduction you can claim in a year is $3,000, the remainder (if any) is carried over to the next tax year.
When you carry over a loss, it retains its original character as either long term or short term. A short-term loss you carry over to the next tax year is added to short-term losses occurring in that year. A long-term loss you carry over to the next tax year is added to long-term losses occurring in that year. A long-term capital loss you carry over to the next year reduces that year's long-term gains before its short-term gains.
If you have both short-term and long-term losses, your short-term losses are used first against your allowable capital loss deduction. If, after using your short-term losses, you have not reached the limit on the capital loss deduction, use your long-term losses until you reach the limit.
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