The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Tax-loss harvesting for a 0.35% annual fee? Date:  10/29/2013  6:38 PM
Author:  intercst Number:  73671 of 88498

ptheland writes,

And you can't forget the investment considerations. Some investments are more speculative than others, or have lumpy returns. Staying out of an investment for the 30 days necessary to avoid wash sale treatment might cost more in foregone investment returns than it saves in taxes. Doubling up on an investment for 30 days (again to avoid wash sale treatment), can have the same effect in a falling market.

From my point of view, tax loss harvesting simply cannot stand by itself. Instead, considerations of selling an investment to recognize a loss is part of your overall annual tax planning.

How so? I'm careful about taking capital gains, but anytime I can harvest a capital loss, I take it. If I can't make use of the capital loss against this year's taxes, it rolls over to next year, or the year after that.

If I'm missing something, perhaps you can give an example of where harvesting a capital loss is detrimental to the taxpayer?

I understand your concerns with being out of the investment for 30 days. What I do is replace the investment with something similar during the 30 day period (e.g. Sell Exxon, buy Chevron and hold for 30 days. Sell an S&P500 index fund, replace it with a Total Stock Market index for 30 days, etc.)

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us