Digging Into Tax-Loss Harvesting

<p>Tax-loss harvesting is a tax strategy, but how does it actually affect your tax return and are there any limitations?&nbsp;</p> <p>In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about tax-loss harvesting&mdash;what it is, why it's beneficial, and how it works on your tax return.</p> <h3><strong>Topics Discussed:</strong></h3> <ul> <li>Tax-loss Harvesting: Only beneficial for those with taxable assets</li> <li>What is tax-loss harvesting? Book losses while staying with similar investments</li> <li>Wash-Sale Rule: Why the IRS won&rsquo;t let you buy the same security back</li> <li>What are the benefits of tax-loss harvesting? <ul> <li>Take up to $3,000 a year of capital losses to offset ordinary income</li> <li>Defer or postpone taxes on normally taxed investment account</li> <li>Give it away to a nonprofit or beneficiary to realize step-up in basis</li> </ul> </li> <li>How does tax-loss harvesting work on taxes? Form 1040, Line 7, Schedule D</li> </ul> <h3><strong>Links:</strong></h3> <p><a href="https://www.investopedia.com/terms/w/washsalerule.asp">Wash-Sale Rule</a></p> <p><a href="https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=Step%2Dup%20in%20basis%2C%20or,the%20asset%20is%20sold%20later.">Step-Up in Basis</a></p> <p><a href="https://www.irs.gov/forms-pubs/about-form-1040">Form 1040</a></p> <p><a href="https://www.irs.gov/forms-pubs/about-schedule-d-form-1040">Schedule D</a></p> <p><a href="https://financeforphysicians.co/contact/">Contact Finance for Physicians</a></p> <p><a href="http://financeforphysicians.co">Finance for Physicians</a></p> <h3><strong>Full Episode Transcript:</strong></h3> <p>Hello, everyone. I hope you're having a great day. Today, I was hoping to cover a question that's come up quite a few times in our work with clients one-on-one. One of you brought up the question specifically, so I wanted to make sure and maybe dig into this a little bit more.</p> <p>The question is about tax-loss harvesting, understanding that a