STUDmoney · Accounts

Tax-loss harvesting

Also known as

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

Community talk may be wrong. Not financial, tax, legal, or investment advice. No return or outcome is promised.

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In brief

Tax-loss harvesting is selling a down lot in a taxable account to bank a capital loss while staying invested.

The common picture

Taxable account onlyIRA/401k harvesting is a different, usually wrong, idea.

Stay investedThey replace the sold fund, not go to cash as a personality.

Wash-sale window: 30 days before through 30 days after the saleBuying substantially identical securities within this window can disallow the loss.

Year-end scrambleNovember–December posts spike.

Losses first offset capital gainsRemaining net losses can offset up to $3,000 of other income per year, or $1,500 if married filing separately; unused losses carry forward.

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.

Good to know. Wash sales. Harvesting inside an IRA. This is not tax advice. Rules move.

What people say

The job: turn a taxable loss into a tax lot while staying in the market.
r/personalfinance, Bogleheads, and 2026 tax-bill explainers keep the phrase loud.
Direct indexing is the paid version of lots of tiny harvests.
Not advice. Wash-sale and the current year’s law are a person and a tax person.

How people do it

Only taxable.
Sell the loser, buy a neighbor fund, calendar the 30 days.
They do not harvest a loss they need for a specific share they must repurchase tomorrow.

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.
Wash-sale window: 30 days before and 30 days after the loss sale, including the sale date.

How people keep it

A spreadsheet of lots.

How it may feel

A paperwork win, not a dopamine trade.

How long

Whenever a lot is down enough to bother, especially late year.

The longer notes

Taxable brokerage is the account.
Roth conversions are a different tax-year tool.

Good to know

Wash sales.
Treating a YouTube ‘OBBBA changed everything’ short as the code.

Earlier wording (updated)

Wash-sale clock Substantially identical + 30 days is the forum chant.

$3,000 net ordinary-income offset is the US number people chant — plus unused losses carrying forward. Confirm the current year.
30-day wash-sale window in the same chant.

Checked sources

Selected links for the notes above, not a review of every historical claim.

IRS: capital gains and losses (opens in a new tab)
Official context · Checked 2026-09-12
Losses offset gains; remaining net loss offsets up to $3,000 of other income ($1,500 married-separate), with unused loss carried forward. This reference explains the named format or rule. Individual community accounts remain attributed in the notes.
IRS Publication 550: wash sales (opens in a new tab)
Official context · Checked 2026-09-12
The substantially-identical repurchase window covers 30 days before and 30 days after the loss sale. This reference explains the named format or rule. Individual community accounts remain attributed in the notes.