Capital losses offset your gains, plus up to $3,000 of other income. Any excess losses are carried over to next year.
Note the wash-sale rule: If you buy the identical securities within 30 days before or after the sale, the loss isn't deductible. Instead the disallowed loss is added to the basis of the new shares. The rule can bite you if your IRA quickly buys stock that you sold at a loss in a taxable account. You can innocently run afoul of this rule if you sell a mutual fund at a loss within 30 days of the date a dividend is reinvested.
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