Capital losses can be used to offset capital gains. If there are excess losses, they can be used to offset up to $3,000 of ordinary income ($1,500 for married persons filing separately), which includes interest on bonds that are not tax-exempt. Any excess loss can be carried forward indefinitely and used in the same manner.
A tax technique of applying a loss or credit from a current year to a later year. For example, a business net operating loss may be carried forward 20 years instead of being carried back.