Gained 70K in 2020,80K in 2021 in Stock and paid ~40K tax on that, but lost 120K in 2022 so in my Tax return of 2022, what will happen? can deduct 120K loss from income?

First of all, 2022 isn't over yet. You have to wait to see what your overall capital gains and losses are for the whole year.

The $120,000 capital loss will first be used to offset any capital gain that you have in 2022. If that doesn't use up the entire loss, up to $3,000 of the loss will be used to offset other income. Any remaining capital loss will be carried over to 2023, and used the same way. A capital loss is carried over from year to year until the entire loss is used up.

You have no choice about how the capital loss carryover is used each year. The calculations have to follow the tax law, and there is only one way to do it.