Capital gains. When you sell anything for more than you bought it you realize a capital gain. Capital losses occur when you sell and investment for less than you bought it.
All you ebayers out there should take careful note of this next paragraph.
Notice that you have a gain if you sell anything for more than you pay for it. You only get a loss if it is an investment. If you buy a car, fix it up to drive it, and sell it for a gain you pay tax on that gain. If you lose money on the deal there is no deduction. Special rules apply if you are in the business of buying and restoring cars but the point is that the government wants "their" money when you work hard and earn yours.
Bottom line: Everybody has capital gains. Obviously the IRS has a hard time finding out about some transactions but if you own mutual funds those gains are reported to the IRS every year. Your 1099 DIV box 2A and a 1099 B will both tell the government how much you made in capital gains.
You can only offset capital gains with capital losses. Short term against short term and long term against long term. If you losses exceed your gains you write off up to $3,000 against your regular income. If your losses exceed $3,000 you can carry forward that loss.
If you have losses in your portfolio meaning your stock is worth less than you paid, sell it. If you believe the stock is still a good investment, wait 30 days and buy it back. If you believe it's coming back fast, purchase a similar investment or fund. The 30 days is to get around the IRS "Wash" rule.
When all is done, you still have your stock and you have a capital loss to offset income.
Call your broker. Why are your waiting?
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