An overview of tax-loss harvesting
Traynor Capital Management was created to provide the ideal environment to allow its clients to grow and protect their wealth. Through the expertise of the firm’s professionals, the company offers clients all they need to achieve their financial objectives. The world-class portfolio strategies of the company are built upon traditional equity and fixed income holdings.
After Traynor Capital Management’s review of 2020, the company concluded the tumultuous year to be a perfect period for tax-loss harvesting. In fact, this trend may very well lead into this current year.
For today’s blog, Traynor Capital Management educates readers on the finer points of tax-loss harvesting.
At its most basic level, tax-loss harvesting is the sale of securities at a loss to offset tax liability, specifically capital gains tax. It is a strategy that investors use to arrest the recognition of short-term capital gains, which usually incur a higher tax rate at federal income tax than long-term capital gains.
According to Traynor Capital Management, tax-loss harvesting, while usually done toward the end of the calendar year, is done within the year by some people. When financially savvy individuals see an unrealized loss, they sell it to allow credit versus realized gains. Once this is achieved, the seller replaces the sold asset with an asset of the same nature to maintain both the portfolio’s expected risks and returns and asset allocation.
When it comes to lowering taxes, tax-loss harvesting is incredibly useful and crucial to many investors, Traynor Capital Management adds.
Traynor Capital Management has world-class portfolio strategies and reviews that are built upon traditional equity and fixed income holdings. These strategies are direct and transparent, which means that Traynor Capital Management’s clients know what they own, know what they pay, and know what they earn. For more related reading, visit this page.
