Yes, you can offset short-term capital gains from mutual fund distributions with short-term capital losses from sale of stocks, but there are limits. 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.
Here is a TurboTax article about capital losses, and another article with more details.
To report these on your taxes, you'll need TurboTax Premier. The program will prompt you with questions that will help you report the capital losses and carry them to your tax return.
