Tax harvesting

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Hello, I am about to take some decent capital gains as I move all my investments away from my financial adviser. I have been trading in a self directed plan for the last 12 months and had a decent return of 19.4% but not all were winners. The 4 losers, ranging from 5 to 8 % are all solid companies that I still want to own as part of my investment plan. Does it make sense to sell these losers and immediately repurchase? the stocks are AQN, INTC, MMM & GNTX

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Asked on February 2, 2022 6:46 am
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Why not transfer your holding "in kind" and avoid the capital gains and losses (but ask about fees to do this)? - problem solved. But one does need a plan to crystalize capital gains eventually.

To add to Dan's comments (which misses that you feel compelled to sell as part of the transfer process), I suspect you are sweating small potatoes with only 5% to 8% losses unless your holdings are well into six figures. (An 8% loss on $100k is $8k, and you get tax relief at your marginal rate of say 50% on 50% of that amount = ~$2k, which will not break the bank.)

Other strategies would be to sell the losing stocks during a "quiet" 30-day period of the markets so you don't miss out before rebuying, or buy something similar/equivalent in the meantime. For example, AQN is in the in the green energy arena, so you could buy say NPI or a similar ETF to capture market moves during the 30-day blackout period before you repurchase AQN.

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Posted by Krispee
Answered on February 2, 2022 2:26 pm
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Keep in mind, you'd have to sell them and wait a minimum 30 days to rebuy. You couldn't rebuy immediately.

Tax loss harvesting on stocks you own is not a strategy I personally execute. It's pretty much a guessing game. You're selling now, hoping the price stays flat or decreases until the 30 days are up and you can rebuy. A positive movement in price can quickly erase a lot of capital loss benefits.

IMO, if you like the companies, hold them long-term. Tax loss harvesting is a strong strategy when selling losers. But it's just pure speculation when you're selling with the intentions of rebuying.

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Posted by Dan Kent
Answered on February 2, 2022 7:52 am