Have You Thought About Tax Loss Selling?

If there are investments that you are going to need to sell in the short-term, or that you think don't have a decent chance of long-term recovery, you may consider the possible wisdom in engaging in what is known as "tax loss selling". This will allow you to write off a portion against your current income in fiscal 2008, and if you exceed a specific level, against future years as well. You can also offset any capital gains you generated in a practice known as "tax harvesting". For those with money in regular brokerage accounts - that is, outside of tax free accounts such as a 401k or Roth IRA - this can make good sense and save you a lot of cash come April 15th.

Not sure if your capital gains would qualify as short-term fully taxable or long-term lower-rate? Take a second to read Capital Gains Tax Holding Periods to find out the answer.