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Helter, you are wrong. First you balance short term gains against short term losses. The net is balanced against long term gains or losses. If there is then a net loss, it can be balanced against ordinary income, but only up to $3000. Any remainder must be carried over to next year.

Schedule D of Form 1040 walks you through this.

By the way, your long term capital gain rate is always less than your marginal rate.
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