Do long term capital losses offset short term capital gains?

Question

Assuming I had only two transactions this year:

1) Sale, long term, A-company stock resulting in a $10,000 loss 

2) Sale, short term, B-company stock resulting in a $10,000 gain 

Does this mean, my total gain is offset by the loss, and there is no tax on the short term gain?

It sounds counter intuitive because short term tax rate is higher than the long term tax rate.

Answer 1

Correct, you will have no net capital gain, thus no impact to your taxes owed. I agree it does seem a bit counterintuitive, but that's just how the law is written. For more complicated scenarios reconciling short- and long-term capital gains and losses, I like this article, which goes over the 4 possibilities.