Tax Loss Harvesting Calculator
Tax Loss Harvesting Savings
Calculate tax savings from offsetting gains with losses
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Formula
Net Gain/Loss = (ST Gains - ST Losses) + (LT Gains - LT Losses). Tax Savings = Tax on gross gains - Tax on net position - ordinary income deduction benefit
Frequently Asked Questions
What is tax loss harvesting?
Tax loss harvesting is selling investments at a loss to offset capital gains and reduce your tax bill. Short-term losses first offset short-term gains, and long-term losses offset long-term gains. Excess losses can offset up to $3,000 of ordinary income per year.
What is the wash-sale rule?
The wash-sale rule prohibits claiming a loss if you buy a substantially identical security within 30 days before or after the sale. If triggered, the loss is added to the cost basis of the replacement security rather than being deductible.
Can capital losses carry forward?
Yes. After offsetting all capital gains and deducting $3,000 from ordinary income, any remaining capital losses carry forward to future tax years indefinitely until fully used.
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