Capital loss is the difference between a lower selling price and a higher purchase price, resulting in a financial loss for the seller.
United States
The IRS states that "If your capital losses exceed your capital gains, the excess can be deducted on your tax return." Limits on such deductions apply. Special wash sale rules apply if the same or substantially similar asset is bought, acquired, or optioned within 30 days before or after the sale.
According to 26 U.S.C. ยง121, a capital loss on the sale of a primary residence is generally tax-exempt.
References
Capital loss Wikipedia(Text) CC BY-SA