I have read in multiple places that you can use investment losses of up to $3,000/year against your taxes.

  • Is this as a deduction or credit? Does it count as an addition to itemized deductions or is it a separate deduction?
  • Are short vs long term losses any different for tax purposes?

1 Answer 1


Related: Tax consequences of short term capital losses

The net capital loss is a deduction, not a credit, and it is a separate item (Schedule D) from your standard deduction, meaning you can take the standard deduction and also deduct up to $3,000 in capital losses.

The nature of the loss (short-term or long-term) is used to calculate your net capital gain.

If you have long-term gains in excess of your long-term losses, you have a net capital gain to the extent your net long-term capital gain is more than your net short-term capital loss, if any.


  1. IRS Topic 409
  2. IRS Publication 550
  3. littleadv's answer to above-linked question

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.