Time for tax-loss harvesting?
For a variety of reasons, such as higher interest rates, rising inflation and supply chain issues, the financial markets were volatile in 2022 — and this volatility probably showed up in your investment statements. Yet, while you may have been less than happy about your investment returns this year, the volatility and depressed prices may offer you some opportunities at tax time Specifically, you may be able to take advantage of tax-loss harvesting. Using this strategy, you sell securities at a loss to offset capital gains, which you may have if you’ve held some investments for years and they’ve greatly appreciated in value. And if your total losses exceed your gains, you could offset up to $3,000 of ordinary income per year and carry over the rest to future tax years.