Taxes

Tax-Loss Harvesting

Definition

Selling investments at a loss to offset capital gains taxes, then immediately reinvesting in a similar (but not identical) asset. Can save significant money on taxes while maintaining market exposure.

Related Terms

Capital Gains

The profit from selling an investment for more than you paid. Short-term capital gains (assets held less than 1 year) are taxed as ordinary income. Long-term capital gains (1+ years) are taxed at preferential rates of 0%, 15%, or 20%.

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