When taking a diversified investment approach, our goal in constructing a portfolio is to combine assets that don’t move together. This means that even during a year which saw the S&P 500 up over 21%1, it may be that some of your investments are trading for less today than when you purchased them.

When we have investment losses, we can harvest or “realize” these losses within a given year to offset tax liabilities on investment gains and personal income. Currently, the IRS allows a married couple filing jointly to deduct up to $3,000 in investment losses from their total income. For single individuals or those married and filing separately, the maximum deduction is $1,500.

It’s important to note that the IRS has several “gotchas” built into the current rules surrounding tax-loss harvesting. Wash sales, reinvestment of mutual fund distributions, and cost basis accounting are just a few of the more technical items to look out for.

Interested in tax-loss harvesting for 2017, but not sure how to get started? Give your Atlas Private Wealth Management Advisor a call or watch our recent webinar covering year-end tax planning.

1Morningstar Performance Report. S&P 500 TR USD (Price) return as of 12/13/2017.

You may also like

Planning on Call, Blog, Resources/ Aug 24, 2020

Planning on Call: Interview with Dr. Elizabeth Arendt

By Tim Hamilton, CFP®, CIMA, CSLP | thamilton@atlaspwm.com Welcome to ‘Planning…

Introducing ‘Planning on Call’ Blog

By Tim Hamilton, CFP®, CIMA, CSLP | thamilton@atlaspwm.com Welcome to ‘Planning…

Blog/ Jul 14, 2020

Atlas Community Highlights – Summer 2020

Each quarter, we provide updates on matters such as Atlas events,…