Tax-Loss Harvesting
Selling a losing investment in a taxable account to "harvest" the loss, which offsets gains and up to $3,000 of ordinary income per year. The portfolio stays invested; the tax bill shrinks.
By Findley's Finance · Last reviewed: September 2026
Why it matters
Tax-loss harvesting turns a down market into a tax asset: realized losses cancel realized gains dollar for dollar, and leftovers carry forward indefinitely. The trap is the wash-sale rule — buy the same security within 30 days before or after the sale and the IRS disallows the loss. Done right it is free money; done sloppily it is a paperwork mess for no benefit.