Tax Loss Harvesting
Tax loss harvesting is a strategy that helps to reduce taxes in a few ways. Tax loss harvesting is not applicable on tax deferred accounts such as IRAs and 401ks.
Netting Gains and Losses
By selling assets with a capital loss, you can net those losses against other capital gains.
Offset Future Gains
Even if you do not have any capital gains, you can still harvest capital losses to be used for future gains.
You may be able to use up to $3,000 of losses per year towards offsetting ordinary income on federal income taxes.