In the US, capital losses can offset capital gains to arbitrarily large numbers, but only $3,000 of capital losses can offset ordinary income. So if you lose $

In the US, capital losses can offset capital gains to arbitrarily large numbers, but only $3,000 of capital losses can offset ordinary income. So if you lose $3M in one year and happen to have $3M in other capital gains then hooray - they offset and you pay no taxes on them. But if you lose $3M in one year and made $300k in income, you are still paying income tax on everything minus $3,000. You get to keep carrying it over so you can apply $3,000 every year - but if you've got losses in the millions they'll never be exhausted in this manner.