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If you have been in the investing game for any period of time, you have no doubt at some point heard someone talk about harvesting gains. Basically, that means taking some of the gains that you’ve made off the table, and offsetting them in full or part with losses.
Short-term capital gains are securities that have been held for less than a year and a day. They are calculated against any short-term losses to give you a total short-term gain or loss. Short-term gains are taxed at ordinary income tax rates.

Long-term gains are securities that have been held for more than one year and a day. They are calculated against any long-term losses to give you a total gain or loss. Long-term gains are taxed at 15% or 20%, depending on your income.

There is a little sneaky tax to be aware of if your income is more than $250,000, and that is Net Investment Income Tax (NIIT), which is an additional 3.8% tax on income, including capital income.
The market is up now and my disclaimer is that I am a tax guy. I know enough about how markets move to get myself in trouble. However, I know, as most people do, that the market is overvalued. Now may be the time to sit with your financial planner and tax accountant and take some gains off the table.
Everyone has one or two losses in their portfolio that they just want to get rid of. The problem with capital losses, however, is that you can only deduct $3000 until the loss is used up. That is unless you have a capital gain to offset the loss. For instance, you sell a security and lose $10,000. That is the only security that you sell all year. You can only deduct $3,000 of that loss, leaving the additional $7,000 that carries forward. If you sell the same security and lose $10,000, and then sell a security with a gain of $15,000, then you have a net gain of $5,000 that you have to pay tax on.
This is where you can begin to harvest some gains. Let’s say that you have a vast portfolio and have some securities with an unrealized loss of $20,000, and other securities with an unrealized gain of $40,000. You could sell the entire portfolio and only pay tax on $20,000.

Harvesting gains is something that you shouldn't do without guidance from your portfolio manager and tax accountant. Don't ever take stock advice from your tax accountant or tax advice from your financial planner, simple as that. They both need to work together to get you the most money and save on taxes as well.
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