Capital Loss Planning

Selling some investments that have unrealized tax loss has the potential to offset the tax liability that is triggered when other investments are sold at a gain. This strategy is called tax-loss harvesting, and it’s one we consider for our clients. Now is a great time for us – as a team – to take this strategy under advisement.

What may seem like a straightforward strategy, however, can be filled with subtle complexities that we should explore.

There are a lot of issues to consider. A few include whether you:

  • Anticipate a tax rate change;
  • Have realized gains or losses, or even losses that you’re carrying over from previous years, which may affect your tax-loss harvesting strategy;
  • Plan to reinvest your tax savings for future growth.

The decision to pursue a tax-loss harvesting strategy can be highly individualized. In addition to general issues, there are tax considerations, long-term issues, and implementation concerns that should factor into your well-thought-out decision. You can count on us to walk you through the important points so you are confident you’ve taken the actions that will support your long-term financial plan.

To facilitate a productive discussion, we have a checklist that outlines 16 considerations that are fundamental to evaluating whether or not to harvest capital losses.

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