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What amount is worth tax-loss harvesting?

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  • What amount is worth tax-loss harvesting?

    Curious how much of a loss makes it worth harvesting to you guys?  Just getting into taxable investing here and learning about TLH.

  • #2
    Just wrote a post about that yesterday, but it won't run for a while. For me, assuming very low transaction costs (no more than $16 commissions round trip) a $500 loss is worth it to me if I'm going to a less preferred option. If I'm going to a more preferred option, less. But there is also the issue of marginal utility of these losses. If you've already got $100K in losses you're carrying year to year, another $500 you can't actually use may not be worth even a few bucks in commissions and hassle. But that first $3000 in losses a year....it doesn't take much for me to go after them.

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    • #3
      I take a loss whenever I can.  If the market or fund drops further in the next 30 days, I can take a loss again and buy back into my original position.  Rinse & repeat.

      EDIT: Within 30 days, you must exchange into a third fund. After 30 days, you can exchange back into the original fund.

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      • #4




        I take a loss whenever I can.  If the market or fund drops further in the next 30 days, I can take a loss again and buy back into my original position.  Rinse & repeat.
        Click to expand...


        This is exactly what I do.

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        • #5
          I take a loss once it hits $3,000.

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          • #6
            I let Betterment's TLH+ do the lifting for me, for better or worse. AFAIK there are no specific fees for it when it switches holdings: one just pays the time-weighted ER for each of the holdings.

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            • #7




              I take a loss once it hits $3,000.
              Click to expand...


              Ditto

               

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              • #8


                If the market or fund drops further in the next 30 days, I can take a loss again and buy back into my original position.  Rinse & repeat.
                Click to expand...


                Isn't this considered purchasing replacement shares?

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                • #9


                  Isn’t this considered purchasing replacement shares?
                  Click to expand...


                  Good catch -- I expect I meant after 30 days, but that was 33 months ago, so who knows... I may have just said it wrong.

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                  • #10
                    More important than the loss amount are the marginal rates involved, assuming you’re not sitting on a boatload of losses like WCI stated.

                    Lots of losses, makes little sense. Otherwise, if you’re currently in the 12% income bracket it makes little sense to do this as a physician. Of course, situations may vary where they might be able to find a narrow path to 0% cap gains rates in the future, but most will be paying at least 15%, assuming rates don’t go up in the future. This is a low hanging fruit target for politicians in need of supplying revenue to their pet programs or (chuckle, chuckle) if they actually wanted to balance the budget. I’d expect rates to go up in the future, just like all other rates.

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                    • #11




                      I let Betterment’s TLH+ do the lifting for me, for better or worse. AFAIK there are no specific fees for it when it switches holdings: one just pays the time-weighted ER for each of the holdings.
                      Click to expand...


                      out of curiosity, how much in losses do you have for the year now?

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                      • #12




                        Curious how much of a loss makes it worth harvesting to you guys?  Just getting into taxable investing here and learning about TLH.
                        Click to expand...


                        i buy monthly, so each month, if i have a loss (usually needs to be 100-200 to make me pull the trigger), ill exchange, add my new money, and then its nothing till the next month.

                        repeat.

                        this year, those small random drops have added up. all for free for me.

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