capital gains tax ↔ tax-loss harvesting

Relations (1)

related 2.00 — strongly supporting 3 facts

Tax-loss harvesting is a strategy used to minimize current capital gains taxes [1], though its long-term effectiveness is contingent upon future fluctuations in capital gains tax rates [2] and the risk that those rates may increase [3].

Facts (3)

Sources

How Tax Loss Harvesting Could Help You Save on Taxes ellevest.com Ellevest 2 facts

claimTax loss harvesting generally defers taxes to a later date rather than eliminating them, which can result in a neutral, positive, or negative financial outcome depending on future changes to capital gains tax rates.

claimA primary risk of tax loss harvesting is the inability to predict future changes in capital gains tax rates, which could result in owing more in taxes later than the amount saved initially.

How tax loss harvesting can help improve your investment returns troweprice.com T. Rowe Price 1 fact

claimA successful tax-loss harvesting strategy helps investors minimize current capital gains taxes by delaying tax payments.