I've been asked a few times recently about using stock losses to offset gains. Here's what you need to know.
If you have profits from selling stock during the year and you also have losses from selling stock, you can use those losses to offset your gains. So if you made $20k selling stock A but lost $20k selling stock B, the $20k loss can be used to offset the $20k gain leaving you with no taxable profits.
Let's use this same example above. But instead of $20k of losses, let's say you had $30k of losses. The $20k of profits is offset by $20k of the losses, but what happens to the other $10k. $3k of it can be used this year to offset your other income such as W2 or self employment. And the remaining $7k is carried forward into future years to offset future gains or income.
Unfortunately $3k is the max the IRS allows each year. But good news is that we track all of this for you so that in future years we know exactly how much unused losses there are available to use.
Hope this helps. If you have questions, please let me know.