The IRS has many “Trick or Treat” outcomes, such as line 13 of the 1040, and most investors get the trick instead of the treat.
What are we talking about? Tax Lost and/or Tax Gain harvesting.
Now is the time to schedule a Tax Harvesting meeting - yes during the Holiday season - as it must be done before the end of the year, and the holidays often remove productivity and days, so time is of the essence!
Gains that have been taken during the year can be offset by selling losers, and there are many strategies for not losing positive exposure of stock or bonds sold, such as weighted ETFs in the same sectors as the stock itself.
Some clients can benefit, because of the choice to own annuities, or because of their wealth being in pre-tax accounts, who have very low income tax rates and can actually sell stocks now and re-buy them 3 seconds later to purposefully step up the cost basis; but even after “causing a reportable gain” on their own tax return, still pay zero additional tax, as the capital gains tax rate is still zero for people under the 15% tax rate.
How do you know? By sitting down with us and doing “Tax What-Ifs” to determine if you should sell and take a loss or if you should sell to take a gain; and why.