Tax Loss Harvesting Calculator

Tax loss harvesting is selling investments at a loss to offset capital gains and reduce tax. Realized losses first offset gains of the same type (short-term against short-term, long-term against long-term), then net against the other type. Any remaining net loss offsets up to $3,000 of ordinary income per year, and unused losses carry forward indefinitely.

It disallows a loss if you buy a substantially identical security within 30 days before or after the sale that created the loss — a 61-day window in total. The disallowed loss is not lost; it is added to the cost basis of the replacement shares, deferring the benefit until you sell those. It applies to stocks, bonds, mutual funds, ETFs, and options.

After offsetting all capital gains, net losses reduce ordinary income by up to $3,000 per year ($1,500 if married filing separately). Excess losses carry forward indefinitely and can offset future gains in full, plus another $3,000 of ordinary income each year.

Losses net against gains of the same character first: short-term losses against short-term gains, long-term against long-term. Short-term gains are taxed at ordinary rates (up to 37%) while long-term gains get 0/15/20% rates, so a short-term loss that cancels a short-term gain usually saves more tax than one applied to a long-term gain.

Yes. Buying the substantially identical security in your IRA triggers a wash sale and the disallowed loss is permanently lost (it cannot be added to an IRA's basis) — per IRS Rev. Rul. 2008-5. Purchases by your spouse or a company you control also count. The rule looks across all your accounts, not just the one you sold from.

The same stock or fund is clearly identical. Two different companies are not. The grey area is index funds: switching from one S&P 500 fund to a different provider's S&P 500 fund is widely used to stay invested while harvesting, though the IRS has never fully defined the line. Switching to a different index (e.g. S&P 500 to a total-market fund) is safer.

Not currently. Crypto is treated as property rather than a security, so the wash sale rule does not apply — you can sell crypto at a loss and rebuy immediately. Legislation to change this has been proposed but not enacted as of 2026. See the crypto tax calculator for details.

Any time during the year, not just December. Good triggers: you have realized gains to offset, a position has dropped meaningfully, or you expect a higher bracket later. Acting earlier in the year leaves more room to reinvest without tripping the 30-day wash sale window.