Help me. Have significant losses like most people this year but I haven't sold anything other than crypto to get it out of binance due to loss of faith in these crypto brokerages/exchanges. TC: 470K (Lot of paper money though)
The premise is different stocks within a sector tend to move in the same direction for a specific macro environment. IE, hotel, travel and cruise ship all are correlate together because all three fall under the same leisure travel workflow. So when one tank, the other one tank as well. When one rise the other rise as well. How this relate to tax loss harvesting is the following: You buy $10 worth of cruise line stock and $10 of hotel stock. Both for fkk during covid. So drop 50% on both stocks. At the end of tac year, you sold all the cruise stocks and put the money to buy hotel stock. You claim loss of $5 on you cruise. Then post new year, economy reopen. Both cruise and hotel stock rally together back to $20 dollar. So you gain $20 of equity gain while able to claim $5 of loss. Where as if you keep both stocks unsold. You gain$20 but cannot claim $5 tax loss
You sell things at a loss to offset things you’ve sold for a gain. If your losses are greater than your gains, you get to deduct $3,000 from income and roll over the remaining losses to future years. https://www.schwab.com/learn/story/how-to-cut-your-tax-bill-with-tax-loss-harvesting
Thanks, this was the gist of what I read. How do I do the rollover of past years' losses on turbo tax? Do I have to have held the stock for a certain period of time like short vs long term capital gains tax? Can I still tax loss harvest if I rebuy the same positions right away and don't sell those new ones?
also depends on the state you live in. NJ doesn't rollover losses of previous years