capital loss

The loss incurred when a capital asset (investment or real estate) decreases in value. This loss is not realized until the asset is sold for a price that is lower than the original purchase price.

Investopedia Says:
A capital loss is essentially the difference between the purchase price and the price at which the asset is sold, where the sale price is lower than the purchase price.

For example, if an investor bought a house for $250,000 and sold the house five years later for $200,000, the investor would realize a capital loss of $50,000.

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Amount by which the proceeds from the sale of a Capital Asset are less than the adjusted cost of acquiring it. Capital losses are deducted first against capital gains, and then against up to $3,000 of other income for married couples filing jointly, and up to $1,500 for married couples filing separately. Any capital losses in excess of $3,000 may be carried over into future tax years. Short-term losses realized on assets sold 12 months or less after purchase are offset against short-term capital gains. Long-term capital losses on assets sold more than 12 months after purchase are offset against long-term capital gains. Capital losses are reported on Schedule D of a tax return. See also Tax Loss Carryback, Carryforward.

Loss from the sale of a Capital Asset.
Example: Collins, an investor, purchases land for $100,000. Two years later she sells it for $80,000. The $20,000 difference is a capital loss, since the land is a capital asset. Note: There are limitations on the amount of capital loss that can be used to offset Ordinary Income.