Tax-Loss Harvesting Strategy 2026: Offset Gains Reduce Taxes
Quick Answer
Sell losing positions to offset capital gains (dollar-for-dollar). Unused losses: deduct $3k/year ordinary income, carry forward indefinitely. 30-day wash-sale rule: cannot buy identical security 30 days before/after (61-day window total).
How It Works
Realized gains $5k - realized losses $3k = $2k net capital gain (taxed). Loss reduces gain dollar-for-dollar.
If losses >gains: deduct $3k/year, carry forward rest.
Wash-Sale Rule
Sell on Dec 15, cannot buy same security Dec 16 - Jan 15 (30 days after). If you violate: loss disallowed. Workaround: buy similar asset (different index, ETF version).