Tax Harvesting, Does it Make Sense?

Calculator with the word tax written in wooden block letters
04 Jan 2017

Even though 2016 has come and gone you may want to consider tax harvesting in your portfolio going into 2017. As always, please consult your personal tax professional for any tax help!

Tax harvesting is the concept of offsetting taxable gains with losses in a given year. This only applies to non-qualified accounts as IRA’s are tax deferred until withdrawn and taxed at ordinary income rates, not the capital gains rate.

Here are a few key points:

-You can offset taxable gains by selling the equivalent amounts in accounts with losses.

-You can deduct up to $3,000 per year in losses against ordinary income even if you have no gains

-You can carry over losses up to $3,000 per year as well

There are other ways to help offset current and future taxes using investments such as Roth and traditional IRA’s contributions. Again, I encourage you to discuss your personal situation with a tax professional. Please feel free to contact any one of our advisor’s at PII and we can get you started in the right direction.

Good Luck! Jeff


Jeffrey Johnston

Jeff has over 30 years of experience in the investment industry. He currently holds his FINRA Serices 6, 63, 66, 7, 24 & 51 licenses with LPL Financial as well as his health and life insurance licenses.