10 Things to Know When Tax-Loss Harvesting a Large Taxable Account

By Dr. James M. Dahle, WCI Founder

I have written before about how to tax-loss harvest. I’ve shown you screenshots for tax-loss harvesting at Vanguard and at Fidelity. I’ve explained why you might not want to tax-loss harvest. I’ve been tax-loss harvesting for a long time, and I’ve learned a lot of practical tips beyond the basics over the years. Today, I’m going to give you some guidance for those with substantial taxable accounts that will make things much more hassle-free.

 

#1 Have a Purpose for the Losses

When you first start a taxable account and then hit your first bear market, you get all excited about tax-loss harvesting. The primary goal there is to get up to that $3,000 amount of losses that you can use as a deduction against your ordinary income. However, once you’ve been tax-loss harvesting for a while and have a six- or seven-figure taxable account, getting $3,000 in losses is no longer really the goal. By this point, you already have tens of thousands or hundreds…

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This article was written by The White Coat Investor and originally published on www.whitecoatinvestor.com