Reply To: Basic Capital Gain Planning

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Kaye Thomas

It appears you anticipate a greater tax benefit from taking the losses in 2019. That’s possible given that losses taken this year will offset long-term capital gains that would otherwise be taxed at favorable rates. Perhaps next year they’ll offset ordinary income (but only up to $3,000) or short-term gains that would be taxed at higher rates. Then again, if the losses are large enough that it will be difficult to use them up next year or within a few carryover years because of the $3,000 capital loss limitation, you could be better off using them against this year’s long-term capital gain rather than having them remain unused for an extended time. So, the answer depends on the dollar amounts involved and what you’re anticipating in future tax returns.