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Accounts · Lots of talk

Tax-loss harvesting

Also called TLH · harvest losses · tax loss harvest · direct indexing harvest

Community talk. May contain inaccuracies. Not financial, tax, legal, or investment advice. No return or outcome is promised.

Tax-loss harvesting means selling an investment below its cost basis in a taxable account to claim a capital loss. People use it to reduce taxes while keeping their money invested. The potential saving depends on their tax situation, replacement investment and wash-sale rules.

Fidelity (2025)

01

How a loss becomes a tax tool

A winning holding can contain losing shares. Cost basis measures taxable gain or loss, generally using purchase cost plus adjustments. A tax lot is a batch of shares bought together. One lot can be below its basis even when the holding overall has gained. Harvesting involves reviewing lots and the broker's share-selection method before selling. An unsold decline is not a realized loss.

Fidelity (2025)

Check purchases before and after the sale. The U.S. wash-sale rule can disallow a loss when substantially identical securities are acquired within 30 days before or after the sale. This includes relevant spouse purchases and IRA purchases. Automatic dividend reinvestment is a purchase too. A different fund name alone does not establish that the replacement passes the test.

IRS Publication 550 (2025)

The replacement choice changes the experience. Buying a sufficiently different investment can preserve broad market exposure; staying in cash can miss a rebound. The window is a tax-deduction rule, not a ban on trading or a special account lock. In a taxable wash sale, the disallowed loss generally increases replacement-share basis and carries over the original holding period, postponing its use.

Fidelity (2026)

Finish with the tax records. Keep dates, lots, proceeds and replacement trades. One year or less is short-term; longer is long-term. Categories net separately, then combine. Form 8949/Schedule D records adjustments and carryforwards.

IRS Publication 550 (2025)

A $5,000 loss first absorbs gains before reaching other income. Simplified U.S. example: $5,000 of usable realized losses and $2,000 of realized gains leave a $3,000 net capital loss. Assuming no other gains, losses, carryovers or wash-sale adjustments, a filer other than married filing separately can use that $3,000 against other income. A $3,000 deduction is not a $3,000 tax refund. If the loss were $8,000 instead, the same gains would leave $6,000 net: $3,000 used now and $3,000 carried forward. Actual returns must preserve the short-term and long-term categories.

Illustration · context: IRS

02

What it can accomplish

Losses offset gains first. Remaining U.S. net losses deduct up to $3,000 yearly ($1,500 married filing separately) against other income; unused losses carry forward.

IRS · federal rules checked 29 Sept 2026

A deduction is smaller than a dollar-for-dollar refund. For illustration, a $1,000 deduction saving tax at 22% saves $220, assuming it is fully usable at that rate. It does not recover the $1,000 investment decline. Actual savings depend on the gains or income being offset.

Fidelity (2025)

Lower tax now can mean more tax later. Reinvesting after harvesting can leave a lower cost basis and a larger future taxable gain. Deferring tax may leave money invested longer, but that is different from permanently avoiding it. Future sales and tax rates affect the eventual value.

Charles Schwab (2026)

03

Good to know

An IRA replacement can forfeit the loss. A substantially identical IRA or Roth IRA purchase within the window can disallow the taxable loss without adding it to IRA basis. This differs from taxable-account deferral. A retirement-account decline does not itself create the taxable loss being harvested.

IRS Publication 550 (2025)

A broker's wash-sale flag is not a complete household check. The IRS's 2026 broker instructions require reporting for covered securities with the same identifier bought and sold in the same account. Cross-account reporting is permitted, but not generally required. Purchases elsewhere can still matter when preparing the return.

IRS Form 1099-B instructions (2026)

Automation does not guarantee a usable saving. Service eligibility and monitored accounts vary. Schwab's disclosures describe missed opportunities, replacement investments performing differently, and trades outside its program creating wash sales. A fee-paying service still needs to justify its cost; a harvested-loss total alone cannot show that.

Charles Schwab · service disclosures

04

From community discussion

An IRA reinvestment complicated a $6,800 loss sale. A participant reported the March 11, 2022 taxable bond-fund loss after about $1,250 was reinvested into that fund in an IRA on February 28. The broker showed no loss adjustment, so they kept a spreadsheet. The purchase amount is not the disallowed-loss calculation; matched shares matter.

Community · Early Retirement

Selling every share did not settle the wash-sale discussion. A March 2025 forum account involved shares bought 11 days before a full sale and a switch to another fund. Replies disagreed about the prior purchase and funds following the same benchmark. The useful question was the entire purchase-and-sale sequence, not just whether the investor ended with zero shares.

Community

The effort felt worthwhile to one investor and excessive to another. One r/Bogleheads commenter regretted the effort after initially enjoying it. Another reported harvesting a $30,000 loss, buying back six weeks later and missing little upside, and was pleased with the carryforward. That timing is an individual experience, not assurance that waiting in cash will work as well again.

Community · Reddit

An adviser fee made the harvested-loss number harder to judge. A Reddit poster reported about $1,600 of losses over six months in a roughly $100,000 direct-indexing account with around 100 individual stocks. They weighed reported annual adviser fees of 0.65–0.75% against convenience and broader planning help. Replies challenged the value; the loss total was not the tax saving or a verified return.

Community · Reddit

Calendars and spreadsheets were part of the workload. Accounts describe turning off automatic buys and tracking lots and replacements. Some skipped harvesting when they needed the same holding back tomorrow; others noticed losses during year-end reviews. Many small service trades meant more records. The potential tax benefit came with this recordkeeping work.

Community

Harvesting and a Roth conversion served different jobs. Discussion distinguished realizing an investment loss from moving eligible retirement assets to Roth, which can create income. Both can affect a tax year without being interchangeable strategies.

Community

References for this topic

Sources and context

  1. Wash Sale question and understanding ↗

    id
    money-wave-taxloss-talk — Wash Sale question and understanding
    role
    Community discussion
    accessed On
    2026-09-23
    locator
    Underthymattress example of a dividend reinvestment close to a planned loss sale; replies debate share matching.
    scope
    A small automatic dividend reinvestment was easy to overlook when the poster counted only deliberate buys. The comments’ exact share rounding and tax calculation were not adopted.
    limitations
    Selected self-reported public posts and replies, not verified outcomes, a representative sample, a prevalence estimate, or financial/legal proof. No private account material or linked financial screenshots accessed.

  2. Publication 550 (2025), Investment Income and Expenses ↗

    id
    money-wave-taxloss-rule — Publication 550 (2025), Investment Income and Expenses
    role
    Official context
    accessed On
    2026-09-23
    locator
    Chapter 4, Wash Sales: 30 days before/after, substantially identical securities, IRA/Roth IRA acquisition and spouse purchase.
    scope
    The loss-sale window includes the 30 days before and after; substantially identical is a facts-and-circumstances test, not a promise that any neighboring fund is safe.
    limitations
    Primary context for the named narrow claim; does not determine an individual account, eligibility or outcome.

  3. Publication 550 (2025), Investment Income and Expenses ↗

    id
    money-guide-tlh-pub-550 — Publication 550 (2025), Investment Income and Expenses
    platform
    IRS
    role
    Official context
    accessed On
    2026-09-24
    locator
    Qualified retirement plans and IRAs, and chapter 4 Wash Sales, including the substantially identical paragraph
    scope
    The publication's rules do not apply to IRA or 401(k) holdings. A wash sale is a loss sale plus a substantially identical purchase in the 30 days before or after, including an IRA or Roth IRA purchase and a spouse's purchase. A disallowed loss is added to the replacement basis except for the IRA purchase. Substantially identical status is facts and circumstances.
    limitations
    The publication is labeled 2025. It does not list which mutual funds are substantially identical to each other, and it does not state the $3,000 excess-loss cap in the wash-sale section.
    slugs
    • tax-loss-harvesting

  4. Topic No. 409, Capital gains and losses ↗

    id
    money-guide-tlh-topic-409 — Topic No. 409, Capital gains and losses
    platform
    IRS
    role
    Official context
    accessed On
    2026-09-24
    locator
    Short-term or long-term, and Limit on the deduction and carryover of losses
    scope
    Holding more than one year is long-term, counted from the day after acquisition through the sale date. Excess capital losses are deductible up to the lesser of $3,000 ($1,500 if married filing separately) or the Schedule D net loss, with the rest carried forward. Sales are reported on Form 8949 and Schedule D.
    limitations
    The page dates its long-term rate brackets to taxable years beginning in 2025. It does not print a tax year on the $3,000 sentence, and it does not explain wash sales.
    slugs
    • tax-loss-harvesting
    • taxable-brokerage
    • three-fund

  5. What is tax-loss harvesting? ↗

    id
    money59-tax-loss-harvesting-fidelity-process — What is tax-loss harvesting?
    platform
    Fidelity
    role
    Professional context
    published Or Updated
    2025-12-08
    accessed On
    2026-09-29
    locator
    Definition; short-term versus long-term; illustrated tax savings; select the most advantageous cost basis method
    scope
    Realizing losses, replacement exposure, tax lots and basis methods; deduction versus tax saving.
    limitations
    Commercial provider education with managed-service promotion. Examples are hypothetical; no personal result or provider recommendation. The article's rate examples are not used as 2026 thresholds.
    slugs
    • tax-loss-harvesting

  6. Publication 550 (2025), Investment Income and Expenses ↗

    id
    money59-tax-loss-harvesting-irs-550 — Publication 550 (2025), Investment Income and Expenses
    platform
    IRS
    role
    Official context
    published Or Updated
    2025
    accessed On
    2026-09-29
    locator
    Chapter 4: Wash Sales; Substantially identical; More or less stock bought than sold; Reporting Capital Gains and Losses; introduction on retirement plans
    scope
    Current available 2025 edition: loss disallowance, related purchases, facts-and-circumstances test, matching by shares, reporting and netting.
    limitations
    Edition year is 2025, not a fabricated 2026 edition. Does not supply an approved fund-pair list. Specialist derivatives and dealer exceptions are outside this ordinary stock/fund card.
    slugs
    • tax-loss-harvesting

  7. Wash sale: Avoid this tax pitfall ↗

    id
    money59-tax-loss-harvesting-fidelity-wash — Wash sale: Avoid this tax pitfall
    platform
    Fidelity
    role
    Professional context
    published Or Updated
    2026-08-28
    accessed On
    2026-09-29
    locator
    What is the wash-sale rule; consequences; ways to maintain market exposure
    scope
    61-day span; basis and holding-period adjustment; IRA exception; substitute investment versus cash.
    limitations
    Provider education, not a ruling approving a specific fund pair. Trading permission does not make a loss deductible.
    slugs
    • tax-loss-harvesting

  8. Topic no. 409, Capital gains and losses ↗

    id
    money59-tax-loss-harvesting-irs-409 — Topic no. 409, Capital gains and losses
    platform
    IRS
    role
    Official context
    accessed On
    2026-09-29
    locator
    Limit on the deduction and carryover of losses
    scope
    U.S. federal capital-loss offset, annual other-income cap and carryforward.
    limitations
    Cap paragraph does not separately print a tax year; checked as the current IRS rule in September 2026. Rate thresholds elsewhere on the page are not imported. Only the concise cap/condition is derived into the card.
    slugs
    • tax-loss-harvesting

  9. Overcoming Volatility with Tax-loss Harvesting ↗

    id
    money59-tax-loss-harvesting-schwab-deferral — Overcoming Volatility with Tax-loss Harvesting
    platform
    Charles Schwab
    role
    Professional context
    published Or Updated
    2026-03-13
    accessed On
    2026-09-29
    locator
    Tax-loss harvesting case study: paragraph distinguishing tax deferral from eliminating liabilities
    scope
    Replacement basis and future tax liability; potential value of deferral, dependent on circumstances.
    limitations
    Promotes Schwab Intelligent Portfolios and presents selected 2022 examples. Promotional harvested-loss totals are not used as expected savings or returns.
    slugs
    • tax-loss-harvesting

  10. Instructions for Form 1099-B (2026) ↗

    id
    money59-tax-loss-harvesting-irs-1099b — Instructions for Form 1099-B (2026)
    platform
    IRS
    role
    Official context
    published Or Updated
    2026
    accessed On
    2026-09-29
    locator
    Box 1g. Wash Sale Loss Disallowed; Wash sales
    scope
    Broker reporting requirement for same-account covered securities with same CUSIP; permission to report additional cross-account losses.
    limitations
    Instructions govern broker reporting, not the full taxpayer loss-deductibility test. No absence of a flag is treated as a safe harbor.
    slugs
    • tax-loss-harvesting

  11. Important Tax Loss Harvesting Limitations and Disclosures ↗

    id
    money59-tax-loss-harvesting-schwab-disclosures — Important Tax Loss Harvesting Limitations and Disclosures
    platform
    Charles Schwab
    role
    Service rules
    accessed On
    2026-09-29
    locator
    Tax-Loss Harvesting Feature; Wash Sale Avoidance
    scope
    Program-specific monitored-account limits, replacement performance, withdrawals, eligibility and no guaranteed reduction.
    limitations
    Schwab program terms are not universal service rules. No minimum or fee is generalized or recommended. Undated body inspected at access date.
    slugs
    • tax-loss-harvesting

  12. Accidental IRA wash sale ↗

    id
    money59-tax-loss-harvesting-er-ira — Accidental IRA wash sale
    platform
    Early Retirement forum
    role
    Community discussion
    published Or Updated
    2022-04-09
    accessed On
    2026-09-29
    locator
    Thread beginning; replies 16–22, especially PaunchyPirate transaction account and spreadsheet follow-up
    scope
    Reported February 28 reinvestment of about $1,250 and March 11 taxable loss of $6,800; no adjustment on broker page; spreadsheet and disagreement about software detecting cross-account events.
    limitations
    First-person 2022 account, not an audited return. Dollar subtraction suggested in the thread is not adopted: disallowed loss requires matching shares. Date identifies the relevant transaction/spreadsheet replies. Broker behavior is historical; thread-start date is not separately verified here.
    slugs
    • tax-loss-harvesting

  13. Is tax loss harvesting worth it? ↗

    id
    money59-tax-loss-harvesting-reddit-effort — Is tax loss harvesting worth it?
    platform
    Reddit r/Bogleheads
    role
    Community discussion
    accessed On
    2026-09-29
    locator
    Comments by Fun_Salamander_2220 and lamkenar; surrounding thread on effort and tax deferral
    scope
    One person found harvesting insufficiently worthwhile; another reported a $30,000 loss, six-week repurchase and satisfaction with little missed upside.
    limitations
    Anonymous reports with relative timestamps; exact original date not inferred. Future carryforward use, tax return and market outcome unverified. No ticker recommendation retained.
    slugs
    • tax-loss-harvesting

  14. Help! Is Tax Loss Harvesting Worth ~0.75% AUM? ↗

    id
    money59-tax-loss-harvesting-reddit-fees — Help! Is Tax Loss Harvesting Worth ~0.75% AUM?
    platform
    Reddit r/Bogleheads
    role
    Community discussion
    accessed On
    2026-09-29
    locator
    Opening post by itteghaps, fee range, follow-up about maxing tax-advantaged accounts, replies on fee value and continuing purchases
    scope
    Reported $1,600 loss harvest on $100,000 over six months; roughly 100-stock direct indexing; reported 0.65–0.75% adviser fees and value attributed to wider planning and convenience.
    limitations
    Client-reported adviser pitch, not current published pricing or a verified saving. Relative timestamps do not establish an exact post date. No promotional lower-fee alternatives or return assertions imported.
    slugs
    • tax-loss-harvesting

  15. IRS Publication 550: wash sales ↗

    id
    quick-irs-wash-sale — IRS Publication 550: wash sales
    role
    Official context
    accessed On
    2026-09-12
    scope
    The substantially-identical repurchase window covers 30 days before and 30 days after the loss sale.
    locator
    Official page or official indexed text read on 2026-09-12.
    limitations
    This reference explains the named format or rule. Individual community accounts remain attributed in the notes.

  16. IRS: capital gains and losses ↗

    id
    quick-irs-capital-loss — IRS: capital gains and losses
    role
    Official context
    accessed On
    2026-09-12
    scope
    Losses offset gains; remaining net loss offsets up to $3,000 of other income ($1,500 married-separate), with unused loss carried forward.
    locator
    Official page or official indexed text read on 2026-09-12.
    limitations
    This reference explains the named format or rule. Individual community accounts remain attributed in the notes.

  17. ACA subsidies vs Roth Conversions ↗

    id
    money-wave-roth-conversion — ACA subsidies vs Roth Conversions
    role
    Community discussion
    accessed On
    2026-09-23
    locator
    PaleontologistNo3040 hypothetical and replies about current premium-credit costs versus future tax uncertainty.
    scope
    A nominal tax bracket did not capture the health-insurance subsidy tradeoff participants were modeling. Their assumed tax and premium numbers are not current verified rules.
    limitations
    Selected self-reported public posts and replies, not verified outcomes, a representative sample, a prevalence estimate, or financial/legal proof. No private account material or linked financial screenshots accessed.

Keep this topic in view

Preserved original record

Earlier public profile and reader notes are preserved separately from the current article. They may contain superseded wording and are not newly checked material.

Read the full original profile
slug
tax-loss-harvesting
name
Tax-loss harvesting
aliases
  • TLH
  • harvest losses
  • tax loss harvest
  • direct indexing harvest
family
accounts
heat
high
talk
Lots of talk
most Discussed
false
first Line
Tax-loss harvesting means selling an investment at a loss in a taxable account so the realized loss can be used under tax rules. A market decline that has not been sold is not the same thing.
why Line
The practical work is tracking tax lots, replacement purchases and automatic reinvestments; a small overlooked purchase can complicate a much larger loss sale.
feel Words
  • tax loss harvest
  • wash sale
  • tlh
  • direct indexing
common Picture
  • lead
    Wash-sale window: 30 days before through 30 days after
    why
    Substantially identical purchases can disallow a loss; a different fund name alone does not settle the question. [community]
  • lead
    Automatic purchases still count
    why
    Dividend reinvestment and relevant purchases in other accounts can affect the transaction history. [community]
  • lead
    Losses first offset capital gains
    why
    Remaining net losses can offset up to $3,000 of other income, or $1,500 married filing separately, with carryforward rules. [community]
watch For
Wash sales. Harvesting inside an IRA. This is not tax advice. Rules move.
what People Say
  • The job: realize a capital loss in a taxable account, then track how that loss is treated. Every purchase already creates a tax lot; harvesting creates a realized gain or loss event. [community]
  • r/personalfinance, Bogleheads, and 2026 tax-bill explainers keep the phrase loud. [community]
  • Managing many small sales: paid harvesting services add their own cost and transaction records. More loss-sale activity does not remove the wash-sale or reporting rules. [community]
  • The transaction history matters: the sale, replacement purchases and relevant other accounts need to be reconciled. Tax software or a professional still needs accurate records. This is not tax advice. [community]
how People Run It
  • Only taxable. [community]
  • Review the loss sale and replacement purchases together. Wash-sale rules consider substantially identical securities bought within 30 days before or after the sale. A different fund name alone is not a safe-harbor test. [community]
  • They do not harvest a loss they need for a specific share they must repurchase tomorrow. [community]
amounts People Use
  • Loss use: offset capital gains first; then up to $3,000 of remaining net loss against other income ($1,500 if married filing separately). Unused losses carry forward. [community]
  • Wash-sale window: 30 days before and 30 days after the loss sale, including the sale date. [community]
how People Keep It
  • A spreadsheet of lots. [community]
how It Feels
  • A paperwork win, not a dopamine trade. [community]
how Long People Run It
  • Whenever a lot is down enough to bother, especially late year. [community]
deep Dive
  • Why the taxable account matters: the strategy uses a realized investment loss under taxable-account rules. A decline inside an IRA does not create the same personal capital-loss deduction. [community]
  • Different from a Roth conversion: harvesting concerns realized investment gains and losses. A conversion concerns moving eligible retirement assets to Roth and possible income in that year. They can both affect tax planning without being interchangeable. [community]
watch For Long
  • Wash sales. [community]
  • A tax-law headline is not the transaction rule: verify the applicable loss and wash-sale treatment instead of assuming a recent law changed every investment-tax calculation. [community]
related
  • taxable-brokerage
  • roth-conversions
  • three-fund
  • fire-number
research Pointer
    house Pointers
      play Pointer
      —
      sources
      • r/personalfinance TLH threads
      • Bogleheads wash-sale talk
      • 2026 tax-bill harvesting explainers
      disclaimer
      Community talk may be wrong. Not financial, tax, legal, or investment advice. No return or outcome is promised.
      quick Answer History
      • field
        commonPicture
        rows
        • lead
          Wash-sale clock
          why
          Substantially identical + 30 days is the forum chant. [community]
      • field
        amountsPeopleUse
        rows
        • $3,000 net ordinary-income offset is the US number people chant — plus unused losses carrying forward. Confirm the current year. [community]
        • 30-day wash-sale window in the same chant. [community]
      • field
        definition
        rows
        • Tax-loss harvesting is selling a down lot in a taxable account to bank a capital loss while staying invested.
      • field
        communityPicture
        rows
        • People replace the sold fund with a neighbor, watch wash-sale windows, and treat year-end as the scramble season. It is not tax advice.
      • field
        whatPeopleSay
        rows
        • The job: turn a taxable loss into a tax lot while staying in the market. [community]
        • Direct indexing is the paid version of lots of tiny harvests. [community]
        • Not advice. Wash-sale and the current year’s law are a person and a tax person. [community]
      • field
        howPeopleRunIt
        rows
        • Sell the loser, buy a neighbor fund, calendar the 30 days. [community]
      • field
        firstLine
        rows
        • Tax-loss harvesting is selling a loser in taxable to bank a capital loss — then staying invested without breaking wash-sale rules.
      • field
        whyLine
        rows
        • Tax-loss harvesting is selling a loser in taxable to bank a capital loss — then staying invested without breaking wash-sale rules.
      • field
        commonPicture
        rows
        • lead
          Taxable account only
          why
          IRA/401k harvesting is a different, usually wrong, idea. [community]
        • lead
          Stay invested
          why
          They replace the sold fund, not go to cash as a personality. [community]
        • lead
          Wash-sale window: 30 days before through 30 days after the sale
          why
          Buying substantially identical securities within this window can disallow the loss. [community]
        • lead
          Year-end scramble
          why
          November–December posts spike. [community]
        • lead
          Losses first offset capital gains
          why
          Remaining net losses can offset up to $3,000 of other income per year, or $1,500 if married filing separately; unused losses carry forward. [community]
      • field
        deepDive
        rows
        • Taxable brokerage is the account. [community]
        • Roth conversions are a different tax-year tool. [community]
      • field
        watchForLong
        rows
        • Treating a YouTube ‘OBBBA changed everything’ short as the code. [community]
      Read the preserved reader notes
      definition
      Tax-loss harvesting means selling an investment at a loss in a taxable account so the realized loss can be used under tax rules. A market decline that has not been sold is not the same thing.
      community Picture
      The practical work is tracking tax lots, replacement purchases and automatic reinvestments; a small overlooked purchase can complicate a much larger loss sale.
      additions
      • text
        One Bogleheads poster counted the date of a deliberate purchase but then noticed a small dividend reinvestment shortly before a planned loss sale. The replies focused on which shares would be affected. The exact rounding in those comments is not treated as tax guidance here; the concrete issue is that automatic purchases are still purchases worth including in the transaction history.
        sources
      • text
        Official context: IRS Publication 550 includes substantially identical purchases in an IRA or Roth IRA and purchases by a spouse in its wash-sale discussion. A broker’s tax form may therefore not capture every relevant transaction across accounts. The rule is wider than merely waiting 30 days to buy the same ticker back in the selling account.
        sources
      guide
      what
      • Tax-loss harvesting is a sale, in a taxable account, of stock or securities for less than their adjusted basis, so the loss can be reported. IRS Topic No. 409 says a capital loss is a sale below adjusted basis. Hold the asset more than one year and the loss is long-term. Hold it one year or less and the loss is short-term. Count from the day after the purchase through the day of sale.
      • It is not a decline inside an IRA or a 401(k). Publication 550 (2025) says its investment-income rules do not apply to assets held in IRAs, 401(k) plans, and other qualified retirement plans. The sale that creates the personal capital loss is a sale in an account where that publication's gain and loss rules apply.
      • A wash sale can erase the deduction. Publication 550 says a wash sale happens when stock or securities are sold at a loss and, within 30 days before or after the sale, the seller buys substantially identical stock or securities, acquires them in a taxable trade, acquires a contract or option to buy them, or acquires them for an IRA or Roth IRA. A purchase by a spouse or a controlled corporation counts as well. The 30 days before the sale are part of the window.
      how
      • Start with a taxable account and one lot. Write the purchase date, the basis, and the current proceeds. Use Topic 409's counting rule for the holding period. If the shares have to be bought back tomorrow in the same security, this is the wrong lot to sell for a loss.
      • Before the sale, list every purchase of the same shares in the prior 30 days, in this account and in others, including an IRA or Roth IRA. Turn off new purchases for the 30 days after the sale. A dividend set to buy more shares is still a purchase. Publication 550's test is the acquisition, not the reason for it. The publication does not treat a different fund name as a safe harbor.
      • Sell the chosen lot. If replacement shares were bought in the window, the loss is disallowed. Publication 550 says to add that disallowed loss to the cost of the new shares, except when the new shares were the IRA or Roth IRA purchase in item (4) of the wash-sale list. The added basis postpones the deduction until those new shares are sold, and the new shares keep the old holding period. The IRA exception does not get that basis add-on.
      • On the return, capital losses net against capital gains first. Topic 409 says the excess loss that can be claimed is the lesser of $3,000, or $1,500 if married filing separately, or the net loss on Schedule D. The rest carries forward. That page dates its long-term rate brackets to taxable years beginning in 2025 and does not print a separate year on the $3,000 sentence. Report the sale on Form 8949 and Schedule D. A normal pass is one lot, the window from 30 days before through 30 days after, and the replacement written down the same day as the sale.
      understand
      • The deduction exists because a realized capital loss offsets capital gains and then a limited amount of other income, with the unused loss carried forward. The sale does not manufacture a loss larger than the difference between basis and proceeds. Buying a replacement keeps market exposure and can also trigger the wash-sale rule. Those are separate facts.
      • Substantially identical is facts and circumstances. Publication 550 says stock of one corporation is ordinarily not substantially identical to stock of another corporation, and that in some cases it may be. A different ticker is not a test the page provides. The miss the community notes describe is a small automatic purchase, or a purchase in another account, inside the 61-day window around a large loss sale. The 1099-B wash-sale flag is one record. It does not see every account.
      • Harvesting inside an IRA is the wrong tool, because Publication 550's capital-gain rules do not apply to the investments held there, while a purchase there can still spoil a loss taken in the taxable account. A headline about a new tax law is not the wash-sale paragraph. The lot list, the replacement trade, and Schedule D still have to be reconciled. Nothing on these pages promises that the tax result is worth more than the economic loss.
      sources
      summary Sources
      note References
      Download original public profileDownload complete article

      End of Tax-loss harvesting