Selling investments that have decreased in value since you purchased them may reduce the amount you pay the IRS.
How Can I Use Losses to Reduce My Tax Bill?
As experienced investors know, not every purchase performs as expected. That means it’s likely your investments include some that have gone down in value since you bought them. With tax season approaching, now is a time good consider selling so you can use the losses to reduce your tax bill.
“Tax loss harvesting” is the name for the strategy of going through your taxable accounts and selling losing investments for the potential tax benefit. Employing this strategy effectively requires understanding:
How selling investments at a capital loss can be used to offset realized capital gains and, possibly, ordinary income
What the deadline is for selling so you can use a loss on your 2017 taxes
That your investment strategy should be – first and foremost – based on your financial goals, not tax considerations
To learn more, download your free guide on tax loss harvesting.