Yes, in most cases, you can deduct stock market losses on your taxes, but with some rules:
- Realized losses only: You must actually sell the stock at a loss, not just see its value drop.
- Offset gains first: Use losses to cancel out capital gains (profits from other investments) within the same year (short-term vs. long-term).
- $3,000 limit: If losses exceed gains, deduct up to $3,000 against other income. Any remaining loss “carries over” to future years.
- Consult a tax professional: Complexities exist, and they can advise on maximizing your deductions based on your specific situation.