What is tax loss harvesting and how can it be used to the advantage of the investor?

[accountinglads]

Tax loss harvesting is a type of investment whereby an investor deliberately sells securities that have lost their value so as to get a capital loss. This loss can be used to offset capital gains that are made in other areas of the portfolio and end up paying less tax. In case of greater losses than gains, the up to 3,000 of the ordinary income may be deducted during the year, and further losses are carried to an unlimited period. To comply with IRS wash-sale regulations, investors tend to redeploy the proceeds in a somewhat, but not substantially, similar asset to continue to have market exposure. The plan is particularly advantageous in taxable accounts and may boost the after-tax gains without changing the long-term investment of the investor. What Is Tax Loss Harvesting