Investing Insights

Yes, You Can Still Find Tax-Loss Harvesting Opportunities in 2024

Nov 22, 2024

Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar, shares her expertise on tax-loss harvesting strategies. She explains how investors can uncover loss opportunities even in a bullish market. Learn about the IRS wash sale rule, effective cost basis calculations, and why tax-loss selling can be advantageous during bear markets. Benz emphasizes the importance of integrating tax-loss selling into your portfolio maintenance strategy, helping you navigate taxes while optimizing your investments.

15:38

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Episode guests

Christine Benz

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Quick takeaways

Tax-loss selling is a strategy focused on identifying underperforming securities to offset capital gains, especially relevant in bullish markets.

Evaluating cost basis methods like FIFO versus specific share identification is crucial for optimizing tax-loss harvesting outcomes and controlling tax implications.

Deep dives

Understanding Tax Loss Selling

Tax loss selling involves reviewing a portfolio to identify securities that are currently valued below their purchase price. This strategy is primarily applicable to taxable brokerage accounts, as utilizing it in tax-sheltered accounts is less beneficial due to the constraints involved. By realizing these losses, investors can offset capital gains, thereby reducing their overall tax liability. The technique becomes especially relevant in years where the market has seen significant gains, allowing investors to tactically manage their tax exposure.

Intro

2min

Navigating Tax-Loss Harvesting and Cost Basis Calculations

3min

Navigating Tax-Loss Harvesting and the IRS Wash Sale Rule

2min

Mastering Tax-Loss Harvesting

5min

Navigating Tax-Loss Selling in Bear Markets

3min

Christine Benz, Morningstar’s director of personal finance and retirement planning, discusses the ins and outs of tax-loss selling and where investors can look for potential opportunities to harvest losses in their portfolios.

What is Tax-Loss Selling?

Are There Limits to How Much You Can Offset Capital?

How to Evaluate Your Cost Basis to Find Loss Opportunities

What is the 30 Day Rule for Tax-Loss Selling?

Why Investors Should Think About Tax-Loss Selling When Markets Are Up

How to Make Tax-Loss Selling a Part of Your Portfolio Maintenance Strategy

Why Tax-Loss Selling is a Bear Market Strategy

Read about topics from this episode.

How You Could Benefit from Tax-Loss Selling This Year

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Ready for a Big Capital Gains Tax Bill?

What You Need to Know About Capital Gains Distributions