While-You-Wait Investing: Tax-Loss Harvesting

 

If you have realized gains this year, you may have the opportunity to offset some or
all of them through tax-loss harvesting. This is a technique you can use to proactively harvest available losses to offset gains by selling depreciated securities, which can be a tremendously helpful portfolio management tool.

It’s slightly counterintuitive – after all, you’re supposed to sell high, right? But the idea is not to eliminate exposure entirely; it’s only a temporary sale to reduce your tax bill, after which you buy back the same stock. In most years, tax loss harvesting has helped many investors harvest enough losses to offset all gains incurred and even hit the maximum deduction amount ($3,000).

Watch our video to learn how tax-loss harvesting works.

To learn more about optimizing your taxes, download Personal Capital’s free tax guide.

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The While-You-Wait video series goes over important financial topics when life puts us on hold.
Waiting for your ride? That’s the perfect time to watch. Leave a comment on what topics you’d like to see us cover next.

This blog is for informational purposes only; we are not in the business of providing specific tax or legal advice and we generally recommend seeking the advice and counsel of a tax professional before taking any action that may cause a material taxable event.


The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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