Tax Loss Harvesting

Tax loss harvesting is the practice of selling an asset in your taxable investment account that has experienced a loss and replacing it with a similar asset to maintain the overall allocation within your portfolio. By realizing, or “harvesting,” the loss you are able to offset taxes on both gains and income. It’s a practice used during downturns to offset gains that may have been realized from sales when markets were at much higher levels.  Tax loss harvesting only applies to taxable investment accounts, not retirement accounts, like IRAs or 401ks as those are tax-deferred.
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