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How Selling a Losing Stock Position Can Lower Your Tax Bill

The article from Kiplinger discusses how selling a losing stock position can benefit investors by reducing their tax liability. It explains the concept of tax-loss harvesting, where investors sell stocks at a loss to offset capital gains from other investments. This strategy can lower the amount of taxes owed on investment gains. The article outlines that losses can offset gains dollar-for-dollar, and if losses exceed gains, up to $3,000 can be used to reduce ordinary income each year, with any remaining losses carried forward to future tax years. It also provides guidance on the "wash-sale" rule, which prevents investors from claiming a loss if they buy the same or a "substantially identical" security within 30 days before or after the sale. The piece emphasizes the importance of strategic planning around these rules to maximize tax benefits while maintaining a balanced investment portfolio.

Read the Full Kiplinger Article at:
[ https://www.kiplinger.com/investing/how-selling-a-losing-stock-position-can-lower-your-tax-bill ]