How can tax loss harvesting reduce the pain of stock market losses?

While the stock market increased significantly in 2024, not every year will be so positive, and during the inevitable market down turns, investors can experience significant losses in their taxable brokerage accounts. This article explores one way investors may diminish their economic loss and potentially improve their overall return: tax-loss harvesting. This strategy involves selling investments at a loss in order to offset capital gains and reduce taxable income, but caution must be taken to avoid violating the wash-sale rule among other pitfalls. High net worth individuals with complex financial situations should always review any contemplated tax strategy with their trusted financial professionals.

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