Search
Exact matches only
Search in title
Search in content
Search in comments
Search in excerpt
Filter by Custom Post Type
{ "homeurl": "http://rismedia.com/", "resultstype": "vertical", "resultsposition": "hover", "itemscount": 4, "imagewidth": 70, "imageheight": 70, "resultitemheight": "auto", "showauthor": 0, "showdate": 0, "showdescription": 1, "charcount": 3, "noresultstext": "No results!", "didyoumeantext": "Did you mean:", "defaultImage": "http://rismedia.com/wp-content/plugins/ajax-search-pro/img/default.jpg", "highlight": 0, "highlightwholewords": 1, "openToBlank": 0, "scrollToResults": 0, "resultareaclickable": 1, "autocomplete": { "enabled": 1, "googleOnly": 1, "lang": "en", "mobile": 1 }, "triggerontype": 1, "triggeronclick": 1, "triggeronreturn": 1, "triggerOnFacetChange": 1, "trigger": { "delay": 300, "autocomplete_delay": 310 }, "overridewpdefault": 0, "override_method": "post", "redirectonclick": 0, "redirectClickTo": "results_page", "redirect_on_enter": 0, "redirectEnterTo": "results_page", "redirect_url": "?s={phrase}", "settingsimagepos": "left", "settingsVisible": 0, "hresulthidedesc": "0", "prescontainerheight": "400px", "pshowsubtitle": "0", "pshowdesc": "1", "closeOnDocClick": 1, "iifNoImage": "description", "iiRows": 2, "iiGutter": 5, "iitemsWidth": 200, "iitemsHeight": 200, "iishowOverlay": 1, "iiblurOverlay": 1, "iihideContent": 1, "loaderLocation": "auto", "analytics": 0, "analyticsString": "", "show_more": { "url": "?s={phrase}", "action": "ajax" }, "mobile": { "trigger_on_type": 1, "trigger_on_click": 1, "hide_keyboard": 0 }, "compact": { "enabled": 1, "width": "200px", "closeOnMagnifier": 1, "closeOnDocument": 0, "position": "fixed", "overlay": 0 }, "animations": { "pc": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "fadeInDown" }, "mob": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "voidanim" } }, "autop": { "state": "disabled", "phrase": "", "count": 10 } }
Select Page

Close up of female accountant or banker making calculationsIt’s harvest time. You might be looking out your window at the slush and snow and thinking “what is he talking about?” You’d be right to wonder, if “harvest time” brings to mind rolling fields and tractors. However, I’m not talking about amber waves of grain, but rather saving you some green, through tax-loss harvesting. Tax-loss harvesting may be an opportunity to reduce your taxable income, softening the blow of a down market.

The long and short of it
In short, a tax-loss harvest occurs when we sell poorly performing positions in taxable accounts and use the losses to offset taxes on any capital gains.  In addition, up to $3,000 of losses, in excess of investment profits, can be deducted against ordinary income, increasing your portfolio’s tax efficiency.  This is another reason that having a balanced and diversified portfolio is beneficial, as it increases the potential for tax-loss harvesting.

For example, if you make an investment of $100,000 in a taxable asset, and it falls to $90,000, you could sell it and “harvest” the $10,000 loss by claiming it against other taxable gains. In some cases, you may be able to claim the loss against up to $3,000 of ordinary income. Suppose you have gains of $5,000 from another asset, those gains would be offset by $5,000 of your $10,000loss.  You can then use $3,000 of your loss to reduce your ordinary income.  The remaining $2,000 may be carried forward to the next tax year.  Of course, as with anything involving tax law, it isn’t always that straightforward.

It’s a wash
I’m sure you’ve heard the colloquialism “it’s a wash;” it definitely applies to loss harvesting, in the form of the “wash sale rule.”  The wash sale rule is the Internal Revenue Service’s way of dissuading you from selling assets for the sake of the tax write-off, so there are several things to keep in mind to make sure you’re not violating this rule and negating your potential tax benefits.

  • You cannot, within 30 days before or after the sale, make a “substantially identical” asset purchase. This will prevent you from claiming the loss on your taxes.
  • The rule applies to multiple accounts held by a taxpayer, as well as his or her spouse, including IRA’s and Roth IRA’s.

Not for everyone
However, there are some instances that may make tax-loss harvesting less than ideal.

  • It may not benefit clients who are eligible for the 0-percent capital gains tax rates.
  • Realizing tax losses lowers tax basis, which makes harvesting harder to do the longer the portfolio grows and may potentially present other tax-planning challenges in the future, especially if you are in a higher tax bracket.

Like so many investment strategies, tax-loss harvesting might not be the perfect strategy for every investor, but its potential benefits warrant a discussion with your Certified Financial Planning professional.  If not this year, maybe next—like a farmer planning a crop rotation during the winter months, there’s never a bad time to think about your asset allocation and start planning ahead.  The market, like the weather, can be unpredictable, but as a personal financial advisor, I always like to be thinking ahead and looking for innovative ways to put my clients’ wealth to work for them.  It may be the first quarter now, but the fourth quarter, like harvest time, will be on the horizon before you know it.

For more information, visit www.retirementandwealth.com.


Buying/Selling Consumer Luxury National Spotlights
Red and white "Sale Pending, Home for Sale" sign in front of a red brick house that is for sale and has recently been sold. Green grass and bushes indicate the spring or summer season. Front porch and windows in background. Real estate sign in residential neighborhood.  Moving house, relocation concepts.
Pending Home Sales Creep Higher in June

Pending home sales were mostly unmoved in June, but did creep...

woman with manicured hand ready to  tap an her tablet. Buying pink high heel slingback online with a mini tablet. The website is fictional, shoes photographed by Peter Hermus
New Members-Only Online Mall Offers Cool Gadgets, Trending Technology and Luxury Gifts

Most members of the National Association of REALTORS® (NAR) already know...

the mississippi river flows southward over st. anthony falls, and by the minneapolis skyline, on its way to the gulf of mexico.
Strongest Housing Gains Seen Down South

Two more states, Mississippi and Maryland, as well as eight metro...

Agent Broker Coaching Lead Gen Teams
Key to success
3 Keys to Success in 2016

Two years ago, we completed a comprehensive planning session at Real...

Marketing Diagram on Futuristic Interface Touch Screen
When Marketing Is Top Priority

To really be seen in the real estate industry, it all...

Couple sitting in their electric car
Save on Your Summer Road Trip

NAR PULSE—Right now, until August 31, you can save $25 on...

Agent Best Practices Branding Broker Niche
La Habra, United States - July 12, 2016: Macro closeup image of pokemon go game app icon among other icons on an iphone smartphone device. Pokemon Go is a popular virtual reality game for mobile devices.
Pokémon GO for Real Estate – Must or Bust?

If you’re anything like me, your social media newsfeeds look a...

Man inputing data on laptop and holding mobile phone in another hand.
Boost Your Online Presence with More .REALTOR Options

Website addresses that end in .REALTOR provide instant recognition as a...

Person. More>>
4 Ways to Update Your Digital Persona

Your digital presence is more important than ever, and now is...

Agent Apps/Gadgets Best Practices Broker Innovation
Silhouette of business people moving and joining pieces of jigsaw puzzle on a business and stock market  blue background, with charts, diagrams, world maps and data arranged on grid and tables. World maps showing continents and countries with economy data and growth diagrams. Light glowing from the center. Copy space on bottom.
PNC Offers Online Business Insights, Webinars and Tools for Agents

Looking for the latest real estate industry information, education and networking...

Woman holding tablet
Stay Connected to Your Business When You’re on the Go

As a busy real estate professional, you’re likely most productive when...

snapchat_real_estate_665x350
Why Snapchat Is Pure Gold for REALTORS®

There is a huge amount of attention being paid to Snapchat...

Business Insights Content Generation Marketing Trends
000027558128_Double
Webinar Recap: Build Your Brand with Next-Gen Social Media

If you’re working in the real estate industry, you already know...

000042086008_Double.jpg
Expanding Your Client Base through Social Media

Today’s buyer will search online at some point during the buying...

Facebook_Live_665x350
Facebook Live the Latest Trend to Infiltrate the Open House Scene

Drumming up interest in an open house may be about as...

Buying/Selling For Your Clients Home Improvement How-To Lifestyle
comback_kitchen
Comeback Kitchen: 3 Old-Is-New Trends

Kitchen design’s trending more behind the times than ahead of the...

468752934
5 Kitchen Island Styles to Fit Any Use

Regardless of the size of your kitchen remodel, adding an island to...

Wall_Panel_450x300
Luxury Wall Panels Take Home Décor to a Whole New Level

Looking to revamp your living space? Before you head out to...

manhattan
RISMedia’s CEO Exchange

RISMedia’s 2016 Real Estate CEO Exchange September 13 & 14, 2016...

Capital Building, Washington
RISMedia’s Power Broker Forum at the NAR REALTORS® Legislative Meetings & Trade Expo

RISMedia’s Power Broker Forum at the REALTORS® Legislative Meetings & Trade Expo...

PB-annual
RISMedia’s Power Broker Forum, Reception & Dinner – Annual

RISMedia Power Broker Events 2016 Orlando, Fla. Friday, November 4, 2016...