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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Monday, May 29, 2006

Investment Loss Harvesting for Tax Purposes

Every autumn you need to think about loss harvesting in your non-retirement taxable investment accounts. You can use up to $3,000 per tax year as losses to offset capital gains and this can make a bad invesment into a tax break.

Now if you lost $9,000 on taxable investments in a year you can take up to $3,000 of that and use it over three tax years. Therefore, a really bad investment can help you out for several tax years.

If you still like the investment you lost money in remember to follow the thirty-day wash rule because otherwise use cannot use the tax benefits of that loss.

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