I don't know about any of this which is why I'm asking the gurus here.

I downloaded statements from my brokerage and fed my realized and unrealized gains/losses and fed it into Grok, asking for advice. It analyzed my tax liability and suggested I sell some of my clunkers, which I did to minimize tax liability. But I'm also asking here to check Grok's analysis and have sent an email to my accountant as well.

I recommend feeding your info to Grok or other A.I. and asking its opinion. If anything, it is interesting to go through and read its analysis. And it gives you exact numbers.

Ah ya I don't know

Brokerage should give you a 1099 that shows net gains or losses. You'll have to give that to your accountant to marry it with the rest of your stuff ie income.

Quote:

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Yes, for U.S. federal taxes, the ability to use excess capital losses to offset ordinary income is limited to a maximum of $3,000 per year ($1,500 if married filing separately). This is a common rule associated with tax-loss harvesting.

However, this limit does not apply to using losses to offset capital gains:

Offsetting Capital Gains: You can use capital losses to offset an unlimited amount of capital gains within the same tax year. Losses are first used to offset gains of the same type (short-term losses against short-term gains, and long-term losses against long-term gains), and then any remaining losses can offset the other type of gain.
Offsetting Ordinary Income: It is only after all capital gains have been offset that any remaining or "excess" net capital loss can be applied against other income (like wages) up to the $3,000 annual limit.
Loss Carryover: If your total net capital loss is more than the $3,000 deduction limit for the year, the remaining loss can be carried forward indefinitely to offset gains or up to $3,000 of ordinary income in future tax years.

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Yukon Cornelius said:

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Brokerage should give you a 1099 that shows net gains or losses. You'll have to give that to your accountant to marry it with the rest of your stuff ie income.

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ok thanks. That's what I've been doing each year...just making sure I wasn't missing a step there. I assumed it all reconciled via the 1099 and you didn't have to physically "write off" beyond that, but wanted to confirm

As far as doing it for a strategy I kind of think tax harvesting is over emphasized. There's a lot to consider when exiting a position IMO. And if it's reduced to just tax harvesting you may very well be over looking a better approach. One caveat being if it drops you below an income tax bracket.

We have a marginal tax bracket system so this doesn't matter at all. Only the dollars in that tax bracket are taxed at that rate, so you can't change your tax rate on all your income by dropping to a lower bracket.

zgolfz85 said:

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I feel dumb even asking these questions, but if you're up on the year and don't have enough losses to completely offset gains, is it still good to sell off your losses to reduce your gains basis for the year (assuming you're ok offloading those stocks of course)?

also, if you're doing it all within a brokerage, is your accountant actually writing that off, or just taking the numbers directly from your brokerage statements?

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Not dumb questions. The answer to your first question depends on your overall investment strategy. If you're holding a stock you believe in and it's in a loss position, do you anticipate it increasing in value the following year? Assuming yes, keep holding. If you don't, then why are you holding it . . . might as well sell it.

I am my own accountant. When I complete the capital gains schedule, I only reflect the overall net gain/loss from my Merrill brokerage account. No need to provide buy/sell supporting documentation. I think Merrill provides this to the IRS. I've never had my return denied.

FTAC2011 said:

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We have a marginal tax bracket system so this doesn't matter at all. Only the dollars in that tax bracket are taxed at that rate, so you can't change your tax rate on all your income by dropping to a lower bracket.

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Your cap gains are based on income bracket and can change based on it.

Losses offset dollar for dollar capital gains. Once that threshold has been met, you can then apply up to $3,000 in losses against your ordinary income.

ProgN said:

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Losses offset dollar for dollar capital gains. Once that threshold has been met, you can then apply up to $3,000 in losses against your ordinary income.

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gotcha -- that's the way I've always thought it was applied, but that article worded some things in a way that confused me

zgolfz85 said:

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ProgN said:

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Losses offset dollar for dollar capital gains. Once that threshold has been met, you can then apply up to $3,000 in losses against your ordinary income.

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gotcha -- that's the way I've always thought it was applied, but that article worded some things in a way that confused me

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Yeah, some people go out of their way to make a very simple topic and turn it into a dissertation.

loss harvesting could be more strategic in down years like 22 where you could do something like sell off a chunk of VOO to realize the loss then immediately buy into VTI which would not trigger wash-sale but still mostly maintain your overall allocation

EliteZags said:

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loss harvesting could be more strategic in down years like 22 where you could do something like sell off a chunk of VOO to realize the loss then immediately buy into VTI which would not trigger wash-sale but still mostly maintain your overall allocation

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Strategy sniper. Love it

from my accountant:

Thanks for the email. If all other income stays relatively the same, your income for 2025 will be higher than 2024. To avoid a penalty for underpayment of federal taxes, you must pay 110% of prior year tax. Your tax amount for 2024 was $XXXX. The target amount would be $XXXXX
In order to avoid a penalty completely, all your tax payments must be paid through payroll withholdings. If you make estimated tax payments, you calculate the quarterly tax owed each quarter and compare how much you pay each quarter to know if you are underpaid for any quarter during the year. So, if you make an estimated tax payment for the fourth quarter, then you might have some quarters that are underpaid and would be subject to a penalty. If you add the payment amount into your payroll withholdings, then you would not have the penalty because regardless of when payroll withholdings are paid, they are treated for penalty purposes as payment evenly throughout the year (1/12).

For GA purposes, to avoid a penalty, you must pay 100% of prior year tax or 70% of current year tax. Penalties are calculated the same way as federal.

So, yes, you can pay an estimate for the fourth quarter if you want to do so. The estimated payment due date is January 15, 2026. An easier thing to do might be to look at your current pay stub and see how much federal withholding you have in your bucket and see how short you are to the $XXXX target and withhold the difference in one of your December payroll checks. If that option is not feasible, then you can pay the difference using an estimated tax payment voucher knowing you might have a small penalty assessed on the 2025 tax return. For GA, your 2024 tax amount was $XXXX. You can do the same exercise for GA as you did for federal.

Tax strategies.
[ol]

Yes, we recommend harvesting all the losses you have in your investment account. Since your gain is short-term, the gains will be taxed as ordinary income subject to your marginal tax bracket rate. Long-term gains gets favorable capital gains tax rates.

If you are charitable minded, you might want to increase your charitable giving and exercise a bunching process, where you give lots of contributions in one year or in a year when your income is higher to offset the higher taxes.

Do you have ability to defer income to a retirement account and if yes, are you maxing out the contribution?

[/ol]

Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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nah, he's announcing huge federal investment in WWR.

GeorgiAg said:

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ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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nah, he's announcing huge federal investment in WWR.

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ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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I don't understand this whole saga in that region. Maybe someone else has better info. Just seems really weird. Blowing up all of the supposed drug boats; now threatening to go into a land invasion there; and also his pardon of the Honduran president has got him released. He was in prison for 45 years for a **** ton of drugs being sent to the US. Just seems there are a lot of holes that need to be plugged…..maybe they will be one day

Those of you hold BTC and might be nervous, I'm watching BITI which is inverse $20-$21 range. Reaction upward from there and you can go long with a stop under as a hedge against your BTC aiming for BITI $27-$28 range.

BucketofBalls99 said:

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ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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I don't understand this whole saga in that region. Maybe someone else has better info. Just seems really weird. Blowing up all of the supposed drug boats; now threatening to go into a land invasion there; and also his pardon of the Honduran president has got him released. He was in prison for 45 years for a **** ton of drugs being sent to the US. Just seems there are a lot of holes that need to be plugged…..maybe they will be one day

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Dude, he's really serious about bringing the cost of coffee down.

Heineken-Ashi said:

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EliteZags said:

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loss harvesting could be more strategic in down years like 22 where you could do something like sell off a chunk of VOO to realize the loss then immediately buy into VTI which would not trigger wash-sale but still mostly maintain your overall allocation

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Strategy sniper. Love it

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I was wondering about this with the bitcoin etfs. Say you sell IBIT and recognize a loss, can you buy HODL immediately after selling IBIT and it's not considered a wash sale?

Chef Elko said:

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Heineken-Ashi said:

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EliteZags said:

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loss harvesting could be more strategic in down years like 22 where you could do something like sell off a chunk of VOO to realize the loss then immediately buy into VTI which would not trigger wash-sale but still mostly maintain your overall allocation

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Strategy sniper. Love it

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I was wondering about this with the bitcoin etfs. Say you sell IBIT and recognize a loss, can you buy HODL immediately after selling IBIT and it's not considered a wash sale?

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Don't know the answer to that, sorry.

GeorgiAg said:

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BucketofBalls99 said:

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ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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I don't understand this whole saga in that region. Maybe someone else has better info. Just seems really weird. Blowing up all of the supposed drug boats; now threatening to go into a land invasion there; and also his pardon of the Honduran president has got him released. He was in prison for 45 years for a **** ton of drugs being sent to the US. Just seems there are a lot of holes that need to be plugged…..maybe they will be one day

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Dude, he's really serious about bringing the cost of coffee down.

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Yes pls. Tired of paying $16 a bag for good beans

No biggie, thought I would ask while we are on the topic of taxes. Always trying to learn

My guess is it's putting pressure on Russia.

ProgN said:

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Trump called a press conference at 1 or 2 pm. Watch for news about Venezuela.

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It's about 401Ks for Kids. Funds will go into SPX for children in tax deferred accounts. Parents will be able to add $5K per year also. That will be huge future influx of cash into the SPX.

https://www.youtube.com/live/VNVgleSOQFw?si=7HbTe-bHhGcFr5hc

My baby was born 12/31/24. We should get a $1k yearly tax writeoff for the luck of being born hours before the cutoff.

Chef Elko said:

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Heineken-Ashi said:

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EliteZags said:

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loss harvesting could be more strategic in down years like 22 where you could do something like sell off a chunk of VOO to realize the loss then immediately buy into VTI which would not trigger wash-sale but still mostly maintain your overall allocation

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Strategy sniper. Love it

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I was wondering about this with the bitcoin etfs. Say you sell IBIT and recognize a loss, can you buy HODL immediately after selling IBIT and it's not considered a wash sale?

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seems those are classified same as crypto which falls under property not security and exempt from wash sale completely

Venezuela is selling oil to Russia. So trying to force the President of Venezuela out.

Politics.

With an ETF being a security, I'm not exactly sure. Seems like a gray area from what I've gathered but yes, wash sale rules don't apply to crypto currencies. I guess I could just sell the ETF and just buy the underlying crypto, it's just so easy to have weekly auto-buys into IBIT.

This reads a little weird. At first it says every baby born between 2025-2028 will be eligible for the $1k government contribution to their Trump account. Then it says 25 million kids under the age of 10 will be eligible for an additional $250 from the Dell donation.

So will kids under the age of 10 also be eligible for the $1k and the additional $250 from Dell?

• Trump Accounts will be available to every U.S. citizen born between January 1, 2025, and December 31, 2028. These innovative, tax-advantaged savings accounts created through President Trump's Working Families Tax Cuts Act enable a generation of American children to begin building wealth from the moment they are born.
• Each Trump Account will launch with a one-time $1,000 government seed contribution. Families and others can contribute up to $5,000 annually; the funds will be invested in a broad stock-market index, remain private property under guardian control until age 18, and, if fully funded and left untouched, could grow to as much as $1.9 million by age 28.
• Thanks to the Dell's unprecedented gift, the first 25 million American children age 10 and under living in ZIP codes with median incomes below $150,000 will receive an additional $250. This historic act of generosity will give millions of low- and middle-income children an even stronger shot at achieving the American Dream.

https://www.whitehouse.gov/articles/2025/12/landmark-dell-gift-supercharges-trump-accounts-for-americas-kids/

Texag5324 said:

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This reads a little weird. At first it says every baby born between 2025-2028 will be eligible for the $1k government contribution to their Trump account. Then it says 25 million kids under the age of 10 will be eligible for an additional $250 from the Dell donation.

So will kids under the age of 10 also be eligible for the $1k and the additional $250 from Dell?

• Trump Accounts will be available to every U.S. citizen born between January 1, 2025, and December 31, 2028. These innovative, tax-advantaged savings accounts created through President Trump's Working Families Tax Cuts Act enable a generation of American children to begin building wealth from the moment they are born.
• Each Trump Account will launch with a one-time $1,000 government seed contribution. Families and others can contribute up to $5,000 annually; the funds will be invested in a broad stock-market index, remain private property under guardian control until age 18, and, if fully funded and left untouched, could grow to as much as $1.9 million by age 28.
• Thanks to the Dell's unprecedented gift, the first 25 million American children age 10 and under living in ZIP codes with median incomes below $150,000 will receive an additional $250. This historic act of generosity will give millions of low- and middle-income children an even stronger shot at achieving the American Dream.

https://www.whitehouse.gov/articles/2025/12/landmark-dell-gift-supercharges-trump-accounts-for-americas-kids/

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Dell bucks are for kids born between 2014 and 2025 with HH income less than $150k.

Heineken-Ashi said:

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Texag5324 said:

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This reads a little weird. At first it says every baby born between 2025-2028 will be eligible for the $1k government contribution to their Trump account. Then it says 25 million kids under the age of 10 will be eligible for an additional $250 from the Dell donation.

So will kids under the age of 10 also be eligible for the $1k and the additional $250 from Dell?

• Trump Accounts will be available to every U.S. citizen born between January 1, 2025, and December 31, 2028. These innovative, tax-advantaged savings accounts created through President Trump's Working Families Tax Cuts Act enable a generation of American children to begin building wealth from the moment they are born.
• Each Trump Account will launch with a one-time $1,000 government seed contribution. Families and others can contribute up to $5,000 annually; the funds will be invested in a broad stock-market index, remain private property under guardian control until age 18, and, if fully funded and left untouched, could grow to as much as $1.9 million by age 28.
• Thanks to the Dell's unprecedented gift, the first 25 million American children age 10 and under living in ZIP codes with median incomes below $150,000 will receive an additional $250. This historic act of generosity will give millions of low- and middle-income children an even stronger shot at achieving the American Dream.

https://www.whitehouse.gov/articles/2025/12/landmark-dell-gift-supercharges-trump-accounts-for-americas-kids/

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Dell bucks are for kids born between 2014 and 2025 with HH income less than $150k.

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Awesome, thanks for clarifying.

After July 4, 2026, and kid under 18 can have a Trump account, and the parents/guardian can contribute up to $5k in the account. It's only kids born between 1/1/2025 and 12/31/2028 that will be eligible for the additional $1k from the Treasury.

At least that's what I'm reading about it. This will probably change the way we invest for our kiddo. Currently we were doing $300/mo to a 529 and $100/mo to a UTMA. I'm not sure if we'll completely move away from the UTMA or split that $100/mo between UTMA and kids 401k account.