Capital Losses
Over the years as an investor, you don’t set out with the goal of losing money. But part of having a well-diversified investment portfolio is embracing the reality that while some assets and investments perform well, others may not perform as you had intended. Sometimes an investment that has lost value can still help your portfolio.
Tax loss planning is a wealth management strategy that can turn a portion of your investment losses into tax offsets, helping turn financial losses into possible future wins.
As a quick tutorial, you “harvest” investments to sell at a loss, then use that loss to lower or even eliminate the taxes you have to pay on gains you made in future years.
This planning can be beneficial to you no matter what tax bracket you’re in. This is one way to possibly lower your tax burden. If you don’t have investment gains to minimize, you may use the losses to offset the taxes you pay on your ordinary income as well.
Some benefits to utilizing capital losses include:
- Tax planning
- Investment assets and properties
- Harvesting losses
- Wealth Planning Opportunities
We understand that thinking about tax-loss harvesting can be daunting as a client of Lion’s Wealth Management you can rest assured that someone always has an eye on the “tax-loss harvesting” ball for you. Our Wealth Advisors keep an eye on what’s happening with your entire portfolio, so we can respond to any changes or opportunities we see to improve performance – strategic tax-loss harvesting is just one part of the bigger picture. If you have any questions about tax-loss harvesting or are interested in the role it plays in your personal portfolio, reach out to us, Lion’s Wealth Management and if you’re thinking about rebalancing or revisiting your risk profile, reach out to us to chat about your goals and how to strategically rebalance your investments while remaining tax efficient.
A good wealth plan will look at investment losses and figure out the best opportunity to work those losses for your benefit.
