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Tax Loss Harvesting (TLH)

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  • Tax Loss Harvesting (TLH)

    I just made some changes to my taxable brokerage account to allow me to effectively Tax Loss Harvest (TLH). TLH is explained well here:



    I have over $200k in my taxable account, but I didn't start it until 2013 so I only have significant unrealized gains. I plan to put another chunk into it in February when my RSU's vest and want to able to TLH if the market tanks after that. In order to do that, I:

    1. Set all positions (current and future) to not reinvest dividends or capital gains. Per the link, this helps simplify the TLH.

    2. Set my tax accounting method to specific lots. I'm glad I did this now because if I had sold any shares in any position under average cost basis, I would be stuck with that method forever. That would require me to mix the shares with significant gains in with any loss sales when I sold. This would essentially prevent TLH.

    Now I am ready and happy. If the market tanks after I dump another $100k into taxable, I can harvest the losses and save them to offset any future gains or just take a $3,000 deduction each year until they are depleted.

    So, if you have a taxable account, might want to check and make sure it is set up properly to take advantage of TLH.

    Corn

  • #2
    done I do it too. Usually end of the year.
    LivingAlmostLarge Blog

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