N🟁N

6 Common Mistakes To Avoid If You Are Harvesting Year-End Tax Losses

The article from MSN Money discusses six common mistakes to avoid when harvesting year-end tax losses. Firstly, it warns against failing to understand the wash-sale rule, which disallows a tax deduction if you buy the same or a "substantially identical" security within 30 days before or after the sale. Secondly, not considering the holding period can lead to missing out on long-term capital gains tax rates. Thirdly, overlooking transaction costs like commissions and fees can reduce the net benefit of tax-loss harvesting. Fourth, neglecting to rebalance your portfolio might result in an asset allocation that no longer aligns with your investment strategy. Fifth, focusing solely on tax savings without considering investment quality or potential future gains can be detrimental. Lastly, not keeping good records of all transactions can complicate tax filing and potentially lead to errors or missed opportunities for tax savings. The article emphasizes the importance of strategic planning and understanding tax implications to effectively manage year-end tax losses.

Read the Full MSN Article at:
[ https://www.msn.com/en-ca/money/savingandinvesting/6-common-mistakes-to-avoid-if-you-are-harvesting-year-end-tax-losses/ar-BB1rkonu ]