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Tax-Loss Harvesting

At Portfolio Solutions® we are always looking for ways to deliver you more value while keeping costs low.  We’ve made many long-term investments in our people and business technologies, which now allow us to offer tax-loss harvesting services to you on an individualized basis at no additional cost. 

What is tax-loss harvesting?

Tax-loss harvesting is a strategy where an investor intentionally sells a security held to realize a short-term or long-term loss. By doing so, the realized loss may be used to offset any realized gains. Losses that remain after offsetting gains can then be applied toward lowering ordinary income, up to $3,000. Furthermore, losses can be carried forward to offset gains in subsequent years.

This strategy can potentially reduce an investor’s tax bill. Could it reduce your tax bill?  It depends.

Should I attempt tax-loss harvesting in the taxable accounts managed for me by Portfolio Solutions®?

The rules and mechanics surrounding a successful tax-loss harvesting strategy are complex, contain risks, and depend on multiple factors surrounding each investor’s personal tax situation in any given year. Generally speaking, if the following pertains to you, you may benefit from tax-loss harvesting:

1.     You hold securities in your taxable account that are currently at a loss

2.     You expect to be in the same or lower tax bracket in the future

3.     You can accept the potential risks and uncertainty involved with executing a tax-loss harvesting strategy

Call us…we can help by analyzing unrealized gains and losses in your portfolio and discussing how they relate to your financial situation and long-term financial goals.

As with all tax matters, we encourage investors to assess their particular situation with the help of their tax advisor.