Glossary · Tax
Tax-loss harvesting
Tax-loss harvesting is selling a position at a loss to realize that loss for tax purposes, usually while maintaining comparable market exposure.
The value is real but frequently overstated, because a harvested loss lowers basis and defers rather than eliminates the liability. It is worth most to clients with offsetting gains and a long horizon.
Done systematically it requires lot-level visibility, wash-sale awareness across every account in the household, and a replacement security that maintains exposure without being substantially identical.
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