You can potentially arbitrage the tax rates, but you can only apply $3k a year of carried losses against income. I don’t think it’s as big as tax avoidance pana

You can potentially arbitrage the tax rates, but you can only apply $3k a year of carried losses against income. I don’t think it’s as big as tax avoidance panacea as you’re making it out to be. Not to mention losses must be applied first to gains of the same type. Akso This “loophole” is used widely among middle and mildly upper class, not just rich. For the real wealthy they have other games they can play, such as charitable organizations or “pledged asset loans” which they take out take tax free, and when they transfer the assets and “reset” the cost basis — they can sell the stock at zero profit and pay back the loan.