Harvesting a loss lets you claim it against realised gains (and, in the US, a limited amount against ordinary income). You immediately repurchase similar (but not 'substantially identical') exposure to stay in the market.
Watch out for the wash-sale rule: rebuying the exact same security within 30 days disallows the loss.
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Open Financial OS →Frequently asked questions
Is tax-loss harvesting worth the effort?
In taxable accounts, often yes — especially during volatile years. Some robo-advisors do it automatically.
Related terms
Capital gain
The profit made when you sell an investment for more than you paid.
Cost basis
The original amount you paid for an investment, used to calculate capital gains at sale.
Wash-sale rule
A rule that disallows a tax loss if you rebuy the same or 'substantially identical' security within 30 days.
Capital gains
Profit from selling an asset for more than its purchase price.
Wash sale
A US rule disallowing a loss deduction when you rebuy a substantially identical security within 30 days.