Most investors are unhappy when their investments decrease in value, and I’m no exception. However, there is a silver lining. By harvesting investment losses, you can offset taxes on gains and income. Let’s begin with some basic terms: A capital gain is a profit on an investment. There are two categories of capital gains: realized and unrealized. A capital gain is unrealized until you sell it, at which point it becomes realized. The same goes for a capital loss.