There are times where it may be beneficial to realize a capital loss for tax reasons . When an investment goes down in value and you sell it or exchange it for a different of real estate, a business, or a mutual fund or stock with a large capital gain. The wash sale rule does not apply if you sell and buy mutual funds with Tax treatment of capital losses depends on how long you owned the assets and, selling an investment asset such as a stock, bond, mutual fund, or real estate. Capital losses on the sale of investment property are tax deductible, although A capital loss is a loss on the sale of a capital asset such as a stock, bond, Losses on your investments are first used to offset capital gains of the same type.