Can you use your losses to lower your capital gain tax?

I've shared this before...In Oct 2020 we sold a small farm in California (long term capital gains). Had a low basis and was going to get clobbered in taxes in April 2021. I also had short term capital gains (things like options) that generated about $20,000. that year.

So come November/December of 2020 I sold 20 to 30 stocks, bought back options (buy to close). I would use every loss I could find. These were both short term capital losses and long term capital losses. It worked really well tax wise for 2020. The only problem was I ended up selling quality stocks that rose quite a bit in December 2020 (30/31 day rule to buy back). Some I bought back...Others I looked elsewhere for value.
 
For stock trades, if you've requested and received traders status from the IRS, you can match losses against gains. If you do not have traders status, you can carry forward your losses at 3k per year max until the losses are absorbed. For futures trades you can file 1256 and get (currently) taxed 60/40 long term, short term gains.
 
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Excerpt for Green Trader Tax - the leading authority on traders taxes.


There are many misconceptions about capital-loss carryovers.

Many traders mistakenly think they can only utilize $3,000 of capital-loss carryovers each year going forward, so they worry it can take a lifetime to use up these losses. They don’t realize capital losses are offset without limitation against subsequent-year capital gains, which means if they remain in capital gains treatment (rather than electing Section 475 MTM ordinary income), they can use these capital losses. The $3,000 limitation is against non-capital gains income, not capital gains.

Here’s an example: If a taxpayer’s capital-loss carryover is $50,000 and his subsequent year capital gains are $60,000, he can apply the $50,000 capital-loss carryover in full on Schedule D; his net capital gain would be $10,000. Conversely, if the subsequent year capital gain is $35,000, the net capital loss before limitation would be $15,000. Up to $3,000 is allowed against other income, and the remaining capital-loss carryover to the following year would be $12,000.
 
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