If you lost money on a stock, the reporting process is the same.

Separate your short- and long-term transactions and figure out just how much cash each cost you. You don't have to fill out a separate Schedule D for stocks you sold at a gain and those you sold at a loss. Simply list all your transactions on the same form, identifying the loss amounts by placing them in parentheses.

When you report a loss, the amount in either Part 1 or Part 2 is first used to counterbalance any gains in the same category. For short-term holdings, these losses can help reduce or even eliminate any costly short-term gains.

When the total of all your capital activities come up in negative territory, that loss -- up to a limit -- can offset your regular income.
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