Mined some lose yesterday

[ducky911]

Not a timer but noticed a long held foreign etf was showing a nice (sic) lose.

Found a very similar etf and within a minute (plus for eft vs mut fund) I made the swap.

Now have a near lifetime of 3000/year deductions.

 

[Aggie1999]

Not a timer but noticed a long held foreign etf was showing a nice (sic) lose.

Found a very similar etf and within a minute (plus for eft vs mut fund) I made the swap.

Now have a near lifetime of 3000/year deductions.

Remember the losses go against any capital gains first before deducting the $3k from ordinary income. This includes dividends.


Someone correct me if I am wrong.

 

[MichaelB]

Remember the losses go against any capital gains first before deducting the $3k from ordinary income. This includes dividends.


Someone correct me if I am wrong.

Capital loses offset capital gains only. After that, up to $3k of losses offset income, including dividends.

 

[audreyh1]

Remember the losses go against any capital gains first before deducting the $3k from ordinary income. This includes dividends.


Someone correct me if I am wrong.

That’s correct.

I’ve also been harvesting losses and buying the same category of index fund with the proceeds.

But I expect my losses to be used up by other capital gains such as long term cap gains distributions from mutual funds - possibly this year, certainly over the next year or two. Most of our income is long term cap gains tax treatment.

I also had some realized capital gains from rebalancing in Jan. Those are now cancelled out and I still have a loss.

 

[Aggie1999]

Capital loses offset capital gains only. After that, up to $3k of losses offset income, including dividends.

I think we are probably saying the same thing. The capital loss from TLH would go against qualified dividends first, then normal income, which includes non-qualified dividends. Correct?

 

[kaneohe]

I think we are probably saying the same thing. The capital loss from TLH would go against qualified dividends first, then normal income, which includes non-qualified dividends. Correct?

The capital loss goes against other CGs first (sch D). If there is more, it can be used up to 3K a yr to offset ordinary income. It is never used directly against qualified dividends which is a good thing since that preserves the tax benefits of being qualified. (CG/QDIV wksht).

 

[RunningBum]

I thought I had a lifetime of losses in the last downturn, but I ate them all up. Just took a larger amount of losses. Perhaps this set will last longer, though it also allows me to take some free cap gains if I need to.

 

[kaneohe]

That’s correct.

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But I expect my losses to be used up by other capital gains such as long term cap gains distributions from mutual funds - possibly this year, certainly over the next year or two. Most of our income is long term cap gains tax treatment.

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One of the joys of TLH this time around is that I managed to get rid of 3 actively managed funds which liked to spit out large CG distribtions most yrs.....one from an index fund even. I even got rid of 1 such fund even tho it was at a (small) gain instead of a loss so I wouldn't be hounded by it any more.
Hopefully my TLH will last a little longer.

 

[Toocold]

I'm still using the $3000 deductions from 2008 losses. I wish I could use them to offset dividends but unfortunately not.

 

[Aggie1999]

The capital loss goes against other CGs first (sch D). If there is more, it can be used up to 3K a yr to offset ordinary income. It is never used directly against qualified dividends which is a good thing since that preserves the tax benefits of being qualified. (CG/QDIV wksht).

Thanks for the clarification. You are right. I guess I just assumed any long term capital loss would have to go against qualified dividends first before ordinary income, as that would be the most advantageous for the govt. I stand corrected.

 

[harley]

After reading this thread I checked to see if I could do any tax loss harvesting. But I've been invested for so long in my after tax bucket that I still don't have any losses. VTI would have to go down another 40% from here before I could do that.

Now my individual stocks are all over the place. But most that show losses are the ones I bought recently. And they're all in my Roth, so it wouldn't do any good. I do have a few individual stocks in after tax, but they're things like Cisco (cost basis $7), Brk.B (cost basis $55), and such. LTBH tends to remove the loss aspect after a couple of decades.

 

[BarbWire]

I desperately need to rebalance and restructure my portfolio (for many life reasons I ignored doing this for the past three years, and now need to get rid of things I inherited three years ago). Harvesting loses right now would be good. But I don't have my new portfolio strategy (simplify holdings, make it more tax efficient) worked out yet.

Any reason -- other than wild market swings -- that I should NOT harvest now (like today or tomorrow), and hold in cash for a few days until I firm up my AA and simplified portfolio structure?

 

[Truckinalong]

I thought you could only do $3,000 a year loss for 8 years?

 

[Sunset]

I desperately need to rebalance and restructure my portfolio (for many life reasons I ignored doing this for the past three years, and now need to get rid of things I inherited three years ago). Harvesting loses right now would be good. But I don't have my new portfolio strategy (simplify holdings, make it more tax efficient) worked out yet.

Any reason -- other than wild market swings -- that I should NOT harvest now (like today or tomorrow), and hold in cash for a few days until I firm up my AA and simplified portfolio structure?

There is the danger that you sell today, and the market rises a few thousand points in a couple of days (10%).

This is actually where I am with a small sale yesterday, of $30K worth, purely a gamble that it would drop today, instead it's up ~5%
So in effect I've missed out on a $1,500 gain today on that $30K of stock.

For less risk, you could simply figure out what you want to invest in, then sell and invest in the same hour. I would caution that funds are difficult to do this with as they only trade at the end of the day.
That is why I stick with ETF's and some stocks and only have a rare fund or two.

 

[kaneohe]

There is the danger that you sell today, and the market rises a few thousand points in a couple of days (10%).

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good point. exactly what happened to me. Sold 2 funds Monday and had funds ACHed to broker. Took 2 days which is reasonably fast but in meantime market was up 10%. Easier if you stay where funds are and just do an exchange which happens simultaneously but I wanted to get rid of some actively managed funds. Only other thing I can think of.......if you have the cash available, send it to broker so you can buy the same day you sell to avoid the 2 day delay. Didn't think of that until later.