I made 20k profit by trading this year, and I see $18k loss on current invested trading portfolio, I am thinking of selling current portfolio for loss to minimize my profit for this year. It’s good idea or bad ? I am 90% sure that I can buy current loss portfolio even after 1 month without paying more if I need.
I think wash sale doesn’t applicable after 31 days, actually I don’t want buy same stock also.
yes, if you dont buy back, basically you are just realizing your loss.
Assume you'll be making back 25% of that loss in tax savings. If you believe that the stock you sold will not appreciate by 25% within 31 days then it makes sense to sell.
Why 31 days? Shouldn't it be after new year to buy back? Also %25 is too low, %40 is more reasonable for average people here. So it's really something to think about.
It’s called tax loss harvesting. Very common. Very strategic.
Be careful, the rule is not a simple "31 days" window. You cannot buy an identical investment within +/- 31 days. So if you have auto-investing turned on, then technically you need to turn it off today, wait 31 days, then sell, then wait another 31 days to rebuy it. Ends up being about 62 days without buying the same investment.
Thanks for clear explanation on this 👍🏼
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That is called a wash sale and is illegal. Unless you buy different investments after selling.
It's not if you buy after 30 days
You can get around the wash sale rules by creating a synthetic position out of options.