It’s time to play match game!

I know you would much rather be thinking about Thanksgiving, Chanukah, Christmas, anything but taxes. What you really need to be thinking about is the end of year moves you need to make now.
One tax saving strategy is to match your capital gains against your capital losses. The tax code allows you to sell investments that have fallen below your purchase price and use the resulting loss to offset capital gains in taxable accounts. That’s a compelling reason to consider jettisoning your losing positions. Investments that you’ve held for a year or less are taxed as ordinary income, but investments you’ve held longer are taxed at the long-term capital gains rate, which ranges from 0% to 23.8%.
After matching short-term losses against short-term gains, and long-term losses against long-term gains, any excess losses can be used to offset the opposite kind of gain. If you still wind up with an overall net capital loss, you can use up to $3,000 of that loss to offset ordinary income and roll the rest over to the following year. Note that once you sell an asset at a loss, you must wait 30 days before reinvesting in it or buying a substantially identical investment.

So free up some tax dollars by playing the match game – you may have more to spend on the holidays.

Disclosures