7 Issues That Can Complicate Tax-Loss Harvesting

7. Tax-Gain Harvesting

Instead of or in conjunction with tax-loss harvesting, tax-gain harvesting might be an appropriate strategy. If your client finds themselves in a low tax bracket this year, harvesting long-term gains can make sense as part of their portfolio rebalancing. Also, as long as there is no associated tax-loss offset, they can repurchase the security at a higher cost basis, reducing future capital gains taxes.

Tax-gain harvesting can also be a good strategy if your client has a large amount of tax losses that have been carried over from prior years that need to be used. As with any strategy, this is only a good idea if it makes good investing sense for them.

Tax-gain harvesting can also be a way to reduce a concentrated position within the portfolio. Longtime holders of stocks like Apple or other tech names might find themselves in this position, as well as clients with a concentrated position in their employer’s shares.

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