Tax-Loss Harvesting

Scroll below to find an overview and useful articles, case studies,
and interactive resources that highlight this innovative and powerful strategy.

OVERVIEW

Tax-loss harvesting is the timely selling of securities at a loss to offset the amount of capital gains tax owed from selling profitable assets. This strategy is commonly used to limit short-term capital gains, commonly taxed at a higher rate than long-term capital gains, to preserve the value of the investor’s portfolio while reducing taxes.

KEY TAKEAWAYS

Tax-loss harvesting is a strategy investors can use to reduce capital gains taxes owed from selling profitable investments.

A tax-loss harvesting strategy involves selling an asset or security at a net loss.

You can use proceeds from a sale to purchase a similar asset and maintain the portfolio balance.

USEFUL ARTICLES

Wall Street Takes Tax-Loss Harvesting to the Next Level- Bloomberg

This insightful article from Bloomberg highlights how money managers have a clever new tactic to cut taxes for rich clients.

Now You Can Avoid Taxes Like The Rich And Famous- Wall Street Journal

This WSJ piece outlines how technology such as AI widens access to tax-optimization strategies, including the launch of funds that explicitly seek to defer tax payments.

How the Wealthy Save Billions in Taxes by Skirting a Century-Old Law- ProPublica

Congress outlawed tax deductions on “wash sales” in 1921, but Goldman Sachs and others have helped billionaires like Steve Ballmer see huge tax savings by selling stocks for a loss and then replacing them with nearly identical investments. Read the ProPublica Breakdown