The loss from selling an asset for less than its purchase price.
A capital loss occurs when you sell an investment (stock, property, etc.) for less than what you paid for it. Capital losses are the opposite of capital gains and reduce your taxable income. In the U.S., you can deduct capital losses against capital gains; if your total losses exceed gains in a year, you can deduct up to $3,000 in losses against other income. Any excess losses can be carried forward to future years indefinitely. Understanding capital losses is important for tax planning: investors can strategically realize losses (tax-loss harvesting) to offset gains and reduce their tax bill. Distinguishing between long-term losses (assets held over one year) and short-term losses (assets held one year or less) matters because they offset gains in different brackets.