A tax-planning strategy in which you sell stock you own at a capital loss to offset current or future capital gains. The difference between the top rates for ordinary income and the capital gains rate makes capital losses more valuable when they are netted against short-term gains. Capital losses from a given year that you cannot net against capital gains can reduce ordinary income for up to $3,000 for joint filers ($1,500 for individual filers), and the remainder of the unused capital losses are carried forward (not also back to past years, as with corporate capital losses). For details on this financial-planning strategy and how the netting and tax reporting works, see a related FAQ.