Yes, a capital loss can be used to offset capital gains during a taxable year, allowing you to remove some income from your tax return. If you don't have capital gains to offset the capital loss, you can use a capital loss as an offset to ordinary income, up to $3,000 per year.
You will see that the loss is applied to the capital gain by looking at Schedule D. Line 7 of Schedule D shows the net short-term capital gain(loss), Line 15 oF Schedule D shows the net long-term capital gain(loss). Line 16 shows the combined net capital gain(loss).
On Form 1040, Line 7 will either have ($3,000) or the remaining capital gain if there was not enough loss to eliminate the gain.
