Why You Should Consider Tax-Loss Harvesting: Amy Shepard from Sensible Money discusses why you should consider tax-loss harvesting.
Tax-loss harvesting is a strategy investors use to reduce their tax liability by selling securities that have lost value to offset capital gains from securities that have appreciated in value. The process involves selling losing securities at a loss and then using those losses to offset capital gains from other securities that have been sold at a profit. The net result is a reduction in the overall tax bill for the investor. When an investor sells a security at a loss, the loss can be used to offset capital gains from other securities that have been sold at a profit. If the losses exceed the gains, the investor can use up to $3,000 of the excess losses to offset ordinary income. Any remaining losses can be carried to future years to offset future capital gains or ordinary income. One of the key benefits of tax-loss harvesting is that it allows investors to defer paying taxes on capital gains until they decide to sell the appreciated securities. Additionally, by offsetting capital gains with losses, it can help investors reduce the overall tax bill on their investments, allowing them to keep more of their investment returns.
It’s important to note that it should be done in accordance with IRS rules and regulations to avoid any violation. Also, it’s recommended to consult a tax professional before implementing any tax-loss harvesting strategy. For more finStream videos featuring Amy Shepard, please click on this link: https://www.finstream.tv/featured/amy-shepard/