I didn’t make that much income this year (student) but will be graduated and working early next year, so my tax bracket is low right now. I also just sold one of my stocks at a 3k loss (BABA for those interested lol) and am wondering if I should take advantage of this loss to reduce taxes on some of the winners by selling before eoy. Does it make a difference that my income bracket is lower now vs next year? I know yall arent advisors I’ll double check before I do anything, but I’m relatively new to investing and wanted some ideas how this works #investments
First thing you have to do is check if you are subject to the "kiddie tax." You can look up the criteria for this. If you are, then (after 2200 of income) the question is more for your parent(s) return as to what is best for them If not in the kiddie tax territory, then you should 'tax gain harvest' since you are in a very low (possibly 0 depending on the state) tax bracket, and thus should recognize gains now
Tech Industry
Yesterday
1607
Do people underestimate E6 role at meta?
Tech Industry
Yesterday
345
How to become a Millionaire
Personal Finance
Yesterday
1159
Thank you AAPL and NVDA
World Conflicts
Yesterday
455
Why I Find Free Palestine Inspiring
India
Yesterday
653
'Hindutva': The Radical Hindu Ideology That Seeks to 'Push Christianity Out of India’
Yes. That is called tax loss harvesting. However, if you are in a low tax bracket now (no income really), then it would be advantageous to realize the $3k in gains now and leave the stock with losses alone (to use to offset gains in the future when your income is higher and your LT capital gains bracket is higher or ST depending on holding period).
could I also sell the 3k and have it roll over to next year if I don’t sell anything now? I’m still hoping to hold some of these stocks to long term
Be careful of wash sale rules. If you're selling at profit for tax purposes, you can't buy back within 30 days.