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"If I have bought 2 stocks A and B at prices 100$ each.

Say I sell A in one month's time (same FY) at 90$ -- loss = 10$.

Then I sell B after a couple of years at 110$.

Can I offset the loss realised from my earlier transaction ? "

It doesn't work quite like that, but close.
We will assume you have no other stock transactions.
In April 2002 you have to file taxes. You lost $10 a share on stock A.
You can take up to $3000 in loss against your ordinary income. So
you take the loss on A, and pay less taxes. You still own B. No taxes
due. If you had more than $3000 in that $10 a share loss, the next
year you can take another $3000 against ordinary income.

A couple years later you have a profit on B. Then you pay taxes
on it. If there is anything left of the original loss, then you can
take it against the profit on B.

Best wishes, Chris

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