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Tax-Loss Harvesting: Turn Market Losses into Tax Savings
Sell losing investments to offset gains, reduce taxable income up to $3,000/year, and avoid wash sales.
July 9, 20267 min readBy MyWealthForge
Key Takeaways
- 1Harvest losses to offset capital gains dollar for dollar.
- 2Excess losses deduct $3,000/year from ordinary income.
- 3Carry forward unused losses indefinitely.
- 4Watch the [wash sale rule](/guides/wash-sale-rule-explained).
Down markets create tax-saving opportunities — selling losers offsets winners and lowers your tax bill.
Best in taxable brokerage accounts.
How to Execute
Identify positions with unrealized losses. Sell and buy similar (not identical) fund. Wait 31 days to rebuy original if desired.
Robo-advisors automate this.
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