Investment losses are not deductible from income. A loss on the sale of investment property is not deductible from your other income, but a capital loss on the sale of personal-use real estate can be deducted as a miscellaneous itemized deduction (subject to limitations) on Schedule A (Form 1040). If you sell an investment for less than what you paid for it and you have no other gains or income, then the difference between what you paid for it and what you got when you sold it is a capital loss.
You can deduct capital losses up to $3,000 in any one year against your other income, but any excess capital losses are carried forward to future years. .Gains and losses on the sale of investment property are treated differently than gains and losses on the sale of personal-use real estate. The difference between what you paid for your property and what you got when it was sold is a capital gain or loss, while the difference between what you paid for your property and what you got when it was sold is a business loss or gain.
A capital gain or loss is unrelated to income, so gains and losses aren’t deductible from income like investment. income.However, if you sell your business property for more than what you paid for it, the excess profit is a capital gain; otherwise, it’s a business loss. The amount of a capital loss that can be deducted from your income is limited to $3,000 in any one year.