Tax-loss selling becomes a strategic opportunity when parts of your portfolio are underperforming, allowing you to offset gains or reduce taxable income effectively.
To maximize tax-loss selling, utilize the specific share identification method, granting you greater control over which lots of a security to sell for tax benefits.
Selling securities below your cost basis can yield capital losses, which can offset taxable gains in a portfolio or reduce ordinary income up to $3,000.
Understanding different cost-basis methods is crucial, as the right strategy can enhance tax-loss selling opportunities especially in environments with capital gains distributions.
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