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Tax Loss Harvesting
Mesa Money Minute
English - May 20, 2022 21:00 - 1 minute - 1.04 MBInvesting Business finance business financial money accounting tax taxes accountant investing cpa Homepage Download Google Podcasts Overcast Castro Pocket Casts RSS feed
Watching the market tank can be anxiety-inducing. However, there can be a tax silver lining to the market downturn. Tax loss harvesting is selling positions within your portfolio at a loss in order to capture or harvest that loss for use against a capital gain. You shouldn't sell losing positions solely for the tax benefits, however you can use this strategy to reduce your capital gains from sales of other positions or real estate, or even reduce your ordinary income by up to $3,000. Consider this strategy if you need to do some routine rebalancing in your portfolio, have an overweighted position in your portfolio, or a position that no longer aligns with your goals. Beware of loss sale rules which disallow losses if you repurchase the same security within 30 days. Speak with your financial advisor and CPA before attempting this complicated stragey.