5 ms·
How? There's a $3000 cap on THL against regular income and capital gains is only taxed at 15%. $1M in realized capital gains is a pretty extraordinary circumsta
by mikedouglas 10y ago
How? There's a $3000 cap on THL against regular income and capital gains is only taxed at 15%. $1M in realized capital gains is a pretty extraordinary circumstance.
- mrkurt 10y agoThe cap is on deductions from regular income if you have a capital loss for a year. So if you have $50,000 in capital gains and $53,000 in capital losses, your gains are "free". And you can deduct the extra $3k from ordinary income. You can also carry capital losses forward each year.
- dragontamer 10y agoYeah. If you have $50,000 in gains but $53000 in losses, then that's called a bad year. You still aren't getting around the fact that you made a crappy investment somewhere to generate that loss.
- sulam 10y agoEvery portfolio has a mix of gains and losses if it's well diversified. I have gains that offset the losses elsewhere, but a reasonable chunk of those gains is offset by losses realized in parts of the portfolio that didn't do so well. If you have a diversified portfolio that is all gains, I think you're probably not actually diversified.
- dragontamer 10y agoVanguard total market. Diversified, but generally speaking it gains every year. And no. Your portfolio is not as diverse as the entire market. Period.
- sulam 10y agoOf course it isn't. But which market? Anyway, we are talking past each other.
- mrkurt 10y agoThat's not really how tax loss harvesting works. You can have a portfolio that's up a total of $50k and _still_ have $50k in losses.