Yes, within limits. If you sell stock at a loss, this "capital loss" is first netted against any capital gains. Then a max of $3000 of the remaining loss will carry to line 13 of the 1040 as a negative number and offset ordinary income. The net loss is limited to $3000 per year, with any unused portion carrying forward to future years.
The process repeats itself each year until the loss is exhausted.
