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Tax loss harvest while in low tax bracket

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  • Tax loss harvest while in low tax bracket

    I am a medical resident about to book $8000 in tax losses for harvesting. I am wondering if I can hold these losses for several years until I am in a higher tax bracket or I have to use the $3000 annually plus capital gains tax off setting? In the same context I am in the 0% long term capital gains bracket but have realized capital gains from my mutual funds. Do the tax losses get used up even though I’m not paying taxes on let’s say $1000 in LT capital gains?

  • #2
    1. You will take the capital loss each year. This will be the excess after netting gains and losses.
    2. Your capital losses will offset the capital gains first. Tax liability is calculated after taxable income is calculated. Taxable income is calculated by netting capital gains and losses.
    Curious as to why you did any TLH if it was not going to benefit you - knee-jerk reaction to recommendations here? Serious question.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      You don’t get to pick and choose the year to use capital losses.