What Issues Should I Consider When Harvesting Capital Losses?

Selling an investment at a loss isn't usually anyone's first instinct, but done deliberately, it can offset gains elsewhere in a portfolio and reduce a tax bill. The strategy only works within certain rules, though, and getting those wrong can undo the benefit.

Timing matters too. Losses harvested too close to a repurchase can trigger the wash sale rule, and losses are generally more valuable when they're used intentionally rather than reactively during a market downturn.