Tax-loss harvesting is the strategy of selling investments at a loss to offset capital gains and reduce tax liability. The proceeds are typically reinvested in a similar (but not identical) security to maintain market exposure.
Tax Savings = Harvested Loss × Marginal Tax Rate
You have $10,000 in realised gains. By selling a losing position for a $5,000 loss, your taxable gain reduces to $5,000. At 20% tax rate, this saves $1,000 in taxes.
AllInvestView identifies tax-loss harvesting opportunities in your portfolio. Read our complete tax-loss harvesting guide and use the capital gains tax calculator.