Identify what your story is about. This sounds easy, but knowing what your story is about and being able to express the subject in its simplest terms is a major hurdle for many beginning writers. If you're having a hard time with this step, your story may not be ready for public consumption.
In 50 words or less, write down your story. During this step, try to include as much of the story as possible without going over the 50-word limit. Ideally, you want this description to read like you are explaining the story to a friend. Include details such as your major character, his/her goal(s) within the story, obstacles in your main character's path, and the story's resolution.
Condense! This is the key step in crafting your logline. Knowing what to take out of your logline is every bit as important as knowing what to include. The ideal logline gives a reader just enough information to make them curious about the story but doesn't provide so much information as to render the actual screenplay moot.
Try it out. After you have fashioned your logline, try it out on your friends/family. If your logline leaves them puzzled and confused, it's time to try again. If, however, your logline piques their interest and causes them to ask questions about how your story turns out, you may have a great logline on your hands.