figner
Recycles dryer sheets
I've been waffling about whether to sell an individual small-cap stock for tax-loss purposes. This isn't a large fraction of my portfolio, but I'm not all that accustomed to harvesting losses so I figure this may be a good exercise for some larger holdings down the line.
To put it in perspective of my asset allocation, some of my small cap allocation is held in a dozen individual stocks (some my own picks, some from a newsletter), while the rest of the allocation is part of the Total Stock Market index fund. Because I have limited room in tax-deferred accounts, this is all taxable. I try to buy-and-hold the individual stocks so as to minimize turnover and taxes.
This stock has been kind of volatile lately (common to bounce up or down by 5-8% in a day), and currently has a loss of 25%. If I sell with the intention of buying back after 30 days, I'm unsure whether a possibly higher price will negate all the savings from the tax loss. Or, I could sell and immediately purchase another individual small-cap, or purchase an index fund (probably Europe or Pacific, as these are most out of line with my intended asset allocation). I'm not keen on the idea of buying a small-cap index fund in my taxable account, due to the turnover tax costs.
Finally, my tax bracket is 28% federal, 9% state (CA). Though this would be a long-term capital loss, I anticipate no capital gains this year so I think I could deduct the entire loss against income.
Any input is appreciated - thanks in advance!
To put it in perspective of my asset allocation, some of my small cap allocation is held in a dozen individual stocks (some my own picks, some from a newsletter), while the rest of the allocation is part of the Total Stock Market index fund. Because I have limited room in tax-deferred accounts, this is all taxable. I try to buy-and-hold the individual stocks so as to minimize turnover and taxes.
This stock has been kind of volatile lately (common to bounce up or down by 5-8% in a day), and currently has a loss of 25%. If I sell with the intention of buying back after 30 days, I'm unsure whether a possibly higher price will negate all the savings from the tax loss. Or, I could sell and immediately purchase another individual small-cap, or purchase an index fund (probably Europe or Pacific, as these are most out of line with my intended asset allocation). I'm not keen on the idea of buying a small-cap index fund in my taxable account, due to the turnover tax costs.
Finally, my tax bracket is 28% federal, 9% state (CA). Though this would be a long-term capital loss, I anticipate no capital gains this year so I think I could deduct the entire loss against income.
Any input is appreciated - thanks in advance!