Our tax-loss harvesting services can help any investor to gain the invaluable tax benefits that can be acquired using this strategy. This is a key strategy to have at your disposal in those critical cases when you need to minimize your losses.
What Is Tax Loss Harvesting?
Tax-loss harvesting is a way to cut your tax bill by selling investments at a loss in order to deduct losses from your taxes. Deducting these losses can offset some or all of the capital gains tax you might owe on other investments that you may have sold for a profit. Our tax-loss harvesting services can help everyday investors minimize what they pay in capital gains taxes by offsetting the amount they have to claim as income. This helps to mitigate the damage of lost assets and can save you a big chunk of cash when implemented properly.
This strategy is typically employed to limit the recognition of short-term capital gains. Short-term capital gains are generally taxed at a higher federal income tax rate than long-term capital gains, which helps investors minimize their losses.
The Tax Loss Harvesting Process Explained
Tax-loss selling is a strategic move that is key for minimizing losses when you need to sell or replace an asset. With tax-loss harvesting, an investment that has an unrealized loss is sold allowing a credit against any realized gains that occurred in the portfolio. The asset sold is then replaced with a similar asset to maintain the portfolio’s asset allocation, expected risk, and also return levels.
Let Our Team Of Experts Turn Your Investment Losses Into Tax Breaks
We can help you “harvest” investments to sell at a loss, then use that loss to lower or even eliminate the taxes you have to pay on gains you made during the year.
Rules to Know About Tax Harvesting
While it is never specifically referenced, there are definitely rules given by the IRS that dictate how to properly execute this strategy properly.
Wash sales rules: The losses you report will not be given a tx break if within 30 days of selling the investment (either before or after) you or your spouse invests in something that is identical (the same stock or fund) or, in the IRS’ words, “substantially similar” to the one you sold.
Cost basis calculations: Good records of every purchase are required in order to come up with the proper cost basis to report to the IRS.
These rules are crucial in order to stay within regulations. Our team has extensive experience enacting this strategy properly and helping investors of all sizes take advantage of this approach within regulatory standards.
Work With Inflection Advisors
Our dedicated team of advisors are ready to work with you to ensure your strategy and plan are ready to grow your base. Reach out today for more information.
