Opposite of capital gain. Loss can offset gain. Ex: Stock A, one share goes from 10 to 15, and Stock B goes from 12 to 9. The net gain is $2, if I sell both of them. Tax is charged on the net gain ($2 in this case). If net gain is negative, $3000 from the loss can be used to offset other incomes in the same year. If more than $3000, then the extra loss can be carried forward to next year.