
Strategy 2
Use long-term losses to create the $3,000 deduction allowed against ordinary income.
Again, you are trying to use the 23.8 percent loss to kill a 40.8 percent tax (or a 0 percent loss to kill a 12 percent tax, if you are in an income tax bracket of 12 percent or lower).
Strategy 3
As an individual investor, avoid the wash-sale loss rule.
Under the wash-sale loss rule, if you sell a stock or some other security and purchase substantially identical stock or securities within 30 days before or after the date of sale, you don’t recognize your loss on that sale.1 Instead, the tax code makes you add the loss amount to the basis of your new stock.
If you want to use the loss in 2020, then you’ll have to sell the stock and sit on your hands for more than 30 days before repurchasing that stock.
Stay tuned for even more money saving strategies!
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