Oct 17, 2026 · 17 min
Tax-loss harvesting can lower bills—but timing matters
10 Tips for Harvesting Investment Losses
The episode explains how investors can use losses and, in some cases, gains to manage taxes without violating account or wash-sale rules.
- 1Tax-loss harvesting applies to taxable, non-retirement accounts, not IRAs, 401(k)s, or HSAs.
- 2Wash-sale restrictions can disallow a claimed loss when investors buy the same investment around the sale.
- 3Investors below specified 2026 income thresholds may sell qualifying long-term gains without owing federal capital-gains tax.
Don't miss
Brokamp explains why selling a profitable investment may be advantageous when qualifying long-term gains fall under the 0% tax rate.
The brief
Robert Brokamp explains how selling an investment at a loss in a taxable account can offset capital gains and limited ordinary income.
The strategy does not apply equally across accounts: IRAs, 401(k)s, and HSAs are excluded, making account type the first constraint.
The wash-sale rule is the central trap, potentially disallowing a loss when investors buy the same investment shortly before or after selling it.
The episode turns the usual advice around by noting that harvesting gains can also make sense for investors eligible for a 0% long-term capital-gains rate.
The practical tension is timing: tax savings depend not only on finding a loss, but on preserving eligibility and choosing the right account and tax year.
What was said on this episode
16 statements · 11 positive · 4 negative · 1 neutral
Selling losses in taxable accounts can reduce taxable income.
“If that investment is in a non-retirement account, you know, not in an IRA, a foreign K, or even an HSA, you can sell it, take the loss, and use it to reduce your taxable income.”
Listen at 0:25
Remaining capital losses can reduce taxable income up to annual limits.
“With any remaining losses, reducing taxable income up to $3,000 per year, $1,500 if you're married and filing taxes separately.”
Listen at 2:17
Investors should generally prioritize losses against short-term gains and ordinary income.
“So it's generally better to use losses to offset short-term gains and ordinary income over long-term gains if possible.”
Listen at 3:16
Repurchasing within 30 days causes the loss to be disallowed.
“Otherwise, the loss is considered a wash sale. A loss that violates the wash sale will be disallowed.”
Listen at 3:34
The wash-sale period spans 61 calendar days around the sale.
“So the wash sale rule actually covers 61 days, the day you sold the investment, the 30 days before that day, and the 30 days after.”
Listen at 6:34
Investors can obtain similar exposure during the wash-sale waiting period.
“That said, there are still ways to gain similar exposure to an investment while you wait for the 30 days to pass.”
Listen at 7:16
Eligible taxpayers below specified thresholds pay no tax on qualifying long-term gains.
“You won't pay any taxes on long-term capital gains up to a point.”
Listen at 11:47
Investors can immediately repurchase after realizing a capital gain.
“You can even immediately buy back the investment. The 30-day wash sale rule only applies to capital losses, not gains.”
Listen at 11:53
Realizing gains and repurchasing can reset cost basis higher without immediate tax.
“This will give you a tax-free reset to a higher cost basis.”
Listen at 11:59
December historically has over 70% positive months and the third-highest average return.
“December has the highest percentage of positive months, more than 70%, and it has the third highest average return behind July and April.”
Listen at 12:58
Tax-loss harvesting may be unattractive if future tax rates are higher.
“So although it may be tempting to take a tax reducing loss whenever possible, you may want to resist if you expect to buy back the investment and expect to be in a higher tax bracket in the future”
Listen at 13:19
Selling and repurchasing lower can increase future gains and taxes.
“when you sell a stock and then buy it back later at a lower price, you now have a lower cost basis, which could lead to a larger capital gain in more taxes later.”
Listen at 13:33
Unused capital-loss carryforwards cannot be transferred after death.
“Your losses die with you, including any loss carry forwards.”
Listen at 14:43
Inherited investments receive favorable treatment for embedded gains.
“That's good news if you pass on investments with large embedded gains since neither your state nor your heirs will ever pay taxes on those gains.”
Listen at 15:06
Donating appreciated investments can avoid tax on long-term capital gains.
“donating long-term appreciated investments to qualified nonprofit organizations. That way, you avoid paying taxes on those long-term capital gains”
Listen at 15:22
Itemizers can deduct qualifying contributions up to 30% of AGI.
“If you itemize your deductions on your tax return, you can also deduct the contribution up to a limit of 30% of your adjusted gross income.”
Listen at 15:45
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Weekly email
State of the Pod, every Monday
The week's most-discussed names and stories from podcasts, with the moments behind them. Free, five minutes, unsubscribe in one click.