Tax-Loss Harvesting Explained: How It Cuts Your Tax Bill

Tax loss harvesting is a strategy where you sell investments that have dropped in value to offset gains you realized elsewhere in your taxable portfolio. In this episode, Ryan walks through the mechanics: a $50 loss on one stock can cancel a $50 gain on another, bringing your net taxable gain to zero. He also covers the extra perk of using up to $3,000 in net losses to offset ordinary income each year.He is honest about the catch: harvesting losses usually defers taxes rather than eliminating them, because your cost basis resets lower and future gains will be larger. It is a timing tool, not a loophole. Ryan explains that long-term capital losses offsetting higher-taxed ordinary income is where the real advantage tends to show up. Tax strategies vary by situation; work with your CPA to determine whether this makes sense for your portfolio.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!