Tax-Loss Harvesting
Tax-loss harvesting means selling a losing investment to 'bank' the loss for tax purposes — then buying something similar (but not identical) so you stay invested. The harvested loss offsets gains you'd otherwise pay tax on. The IRS blocks the trick if you buy the same thing back within 30 days (the wash-sale rule).
Example: Sell a fund sitting on a $5,000 loss and use it to wipe out $5,000 of gains elsewhere — same portfolio, smaller tax bill.
Related
Educational content only — not financial advice.