Avoiding Taxes THIS Year w/ Tax Loss Harvesting

Рет қаралды 6,965

4 жыл бұрын

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Пікірлер: 64

@JakeBroe 3 жыл бұрын

Thanks for watching everyone! If you found this video helpful, then support my channel by giving this video a LIKE and check out my entire playlist of videos on investing with Fidelity! kzfaq.info/sun/PLscTZuOqKWIxSG8kRA7uxvJZQkz0q9Hko

@michaelzlai 4 жыл бұрын

This is great! I was talking to my sister about this earlier and you broke it down well.

@JakeBroe 4 жыл бұрын

Sweet! Thanks for the comment and support Michael!

@peppybassmo 2 жыл бұрын

my investing people just did this for me and this was a good explanation of what they did thank you

@JakeBroe 2 жыл бұрын

You are very welcome peppybassmo!

@ManorothFamily 4 жыл бұрын

Somehow you read my mind, I was just doing some research on this right now :) thank you

@JakeBroe 4 жыл бұрын

You are welcome Vong! Cheers!

@aaronfallon6738 2 жыл бұрын

Thank you so much! Just watch a Charles Schwab video on tax law harvesting and I was still confused. Thank you for information about CUSIP and same day sell one stock buy another similar stock.

@JakeBroe 2 жыл бұрын

You are very welcome Aaron! Cheers!

@shijoabraham1730 4 жыл бұрын

Thanks. Love these stock videos. Learning a lot.

@JakeBroe 4 жыл бұрын

Thanks for the comment and support Shijo! Cheers!

@bridgetg1916 4 жыл бұрын

Great video, Jake! Thanks so much.

@JakeBroe 4 жыл бұрын

You are welcome BF G! Cheers!

@aceravi10 3 жыл бұрын

Say if I have unrealized loss and gain(both equal amount) in my stock portfolio, can I just do a non-wash sale on my loss, and same day sell and buy on the gain stock ? So the capital gain/loss is zero

@kunalgupta5996 2 жыл бұрын

can i sell individual stocks at a loss and then buy back an etf that hold them? Can I sell my tech stocks for a loss and then by qqq and claim the loss? Or is that considered a wash sale?

@joelrendon7886 2 жыл бұрын

in part 7:19. why would one have to pay tax on the recovery gain if the security was purchased before at the same price after the 30% percent recovery?

@EvilGenius007 4 жыл бұрын

Yay, it's here!

@EvilGenius007 4 жыл бұрын

A little disappointed you didn't focus on the value of taking a loss against ordinary income this year and then selling and realizing long terms capital gains in a future year. For anyone who wants the example I'm talking about, let's go small. Say you had $10,000 invested in VOO. Regardless of the market value, we're talking about a $10k cost basis. When the market collapsed you sold out for $8000 and moved that money into VTI. You've realized a $2000 loss this year. Now if your federal income marginal tax rate is 22% you'll owe $440 less taxes this year. There has to be a catch, right? Well, when your alternative investment (VTI) recovers that $2000 you'll owe capital gains tax on those $2k in addition to whatever other growth you experience. BUT if you wait for more than a year to sell that new investment you'll owe your taxes on the growth at the long terms capital gains rate, say 15% or $300 total on those $2000 of appreciation. So you've traded $440 in savings this year for $300 in taxes in some future year. Jake covers this without giving detailed examples of LTCG vs. Ordinary Income marginal rates.

@JakeBroe 4 жыл бұрын

You are correct! That's a great example using reasonable dollar amounts. Thanks EG!

@iron1215 Жыл бұрын

can a neg long-term net offset a positive short-term net? so for example short-term net 17,350.00 long-term net -35,540.00

@dontswin Жыл бұрын

How would you handle a long term net loss and a short term net loss when the total of them both is only $1800 (this would be the total calculations of 2 separate brokerage accounts taken together)? If I can harvest up to $3000 per year in losses which would be better tax wise to sell at a loss(to add up to the $3000): short term losses or long term losses? I can't seem to-figure this? Please respond, thanks. Is that even clear?

@JacksonWelch 4 жыл бұрын

Very educational Jake, even tho I'm getting my MBA & CPA I learned something!

@JakeBroe 4 жыл бұрын

Fun stuff, eh? This video totally bombed, but I'm going to keep making content that I personally find interesting. Thanks for sticking with me!

@aventador8794 4 жыл бұрын

Jake, could you possibly make a credit card video showing what an advanced cashback setup (like 6-8+ cards) would look like and compare it to the Trifectas/Quadfectas?

@JakeBroe 4 жыл бұрын

Haha, 6-8 cards isn't a setup, it's a hobby and you are a collector. Getting the no annual fee best category cards plus all the rotating 5% cards will put you at 6-8 and that is the best setup if you can manage and remember them all.

@jaysant6958 Жыл бұрын

When you read the Wash Sale Rule, it says you can’t do it with similar stocks but earlier you did an example of selling Coca-Cola & buying Pepsi. I guess what it comes down to is what CUSIP thinks is considered “similar” right? And in this instance it doesn’t think Coca-Cola & Pepsi are similar?

@racewiththefalcons1 4 жыл бұрын

So, do you need to hold the position for a year before selling, or does that not matter as long as your holdings for that taxable year result in a negative even if you only held the holding for a few months? And how soon do you have to buy the secondary holding with the money from the losses?

@JakeBroe 4 жыл бұрын

If you want the beneficial long term capital gains tax rate, you still need to hold it for 366 days.

@alexandroshadjigeorgiou2740 3 жыл бұрын

But VOO and SPY cusip number are not the same..why you cannot invest?!

@ladylyonteeth3952 Жыл бұрын

If you had a 300k loss this year, but didn’t have gains…it Carries over to following year? So then, if you gain 300k next year, can that prior loss cancel out the tax consequence?

@joefarah 3 жыл бұрын

Hey Jake, so if I’m understanding this properly, say I sell stock A at a $5000 loss, and use the remaining balance to invest in stock B same day, does that mean that stock B’s appreciation will be tax free? Up to $5000?

@JakeBroe 3 жыл бұрын

Hey Joe, in your scenario, let's pretend you don't buy or sell any other stocks this tax year, then at the end of the year you would show a -$5,000 loss in investments. You only realize and pay taxes on gains of stocks you sell. If you sold stock A today at a loss of $5,000, then bought stock B, then on Dec 31st you sold it for a $5,000 gain, then this tax year you would be net neutral this year for your stock gains and loses. You have to sell before you realize.

@joefarah 3 жыл бұрын

Jake Broe Got it. Thanks Jake!

@zunedog31 2 жыл бұрын

I have gains for the year but don't have any losers right now. Is there a situation where I'd want to put on a risky options play now (in Dec) with the thought that if it shoots up I win and if it becomes worthless I deduct that from gains?

@JakeBroe 2 жыл бұрын

Hey zunedog! I would not recommend that idea. If your marginal tax rate is 22%, then you are saying you are willing to risk and lose $100 to avoid having to pay $22 in taxes. You just threw away $88 to spite the IRS. If you don't have any losers, then you had a great year! Congrats!

@zunedog31 2 жыл бұрын

@@JakeBroe Makes sense, thank you!

@ashkanghaffari774 3 жыл бұрын

Great video. I thought that if your relatives inherit your portfolio they get a step up in basis. Ie they could sell it all as soon as they received their inheritance and pay no capital gains.

@JakeBroe 3 жыл бұрын

Thanks Ashkan! I am honestly not entirely sure. I plan to do some more research on inheritance and estate taxes and I'll for sure make a video about it some day. Thanks for the comment!

@jordanbergman1387 3 жыл бұрын

Hi there, Ashkan. I'm a CPA and tax accountant and you are correct, when someone passes away whoever inherits the stock gets a step-up in basis. This is subject to change in the future though, and has a greater chance when Democrats hold control of the white house; but it is likely to gain traction because it is typically a popular tax position among both Democrats and Republicans.

@chasfischer2844 4 жыл бұрын

Jake, Off video subject; what is the basic differences in a Charles Schwab high yield checking account to a Charles Schwab high yield savings account? Other than one is a checking and the other is savings they both have the same interest rate.

@JakeBroe 4 жыл бұрын

If the savings rates are the same right now, then the only difference is the checking account will get you a debit card and checks if you want them.

@chasfischer2844 4 жыл бұрын

@@JakeBroe I was mistaken, the savings account has a 0.05% interest rate and checking has a 0.03% interest rate, slight difference. Thanks for the response.

@trevormatthews6518 3 жыл бұрын

Do you have to completely close out a security to tax loss harvest or can it be any loss, such as just trimming a position at a loss?

@JakeBroe 3 жыл бұрын

Hey Qayin! You can just trim a position if you like. Whatever your cost basis is compared to what you sold those shares at.

@trevormatthews6518 3 жыл бұрын

@@JakeBroe thank you

@loganbyrd5667 2 жыл бұрын

@@JakeBroe From my understanding, I thought that you could sell and realize a loss and not even have to buy back anything at all and still use that loss against your capital gains...and if you don't have any capital gains, you can just use that loss (up to $3,000) to offset regular income that year or any year into the future?

@jaysant6958 Жыл бұрын

Also I don’t quite understand 7:50 in that you say that if you take a 300k loss you may never have to pay taxes on future appreciation and handed down to a beneficiary as long as they don’t sell and just continue to collect dividends if it pays dividends. Isn’t this the case regardless if a person sells for a 300k loss? Nobody pays taxes on appreciation as long as it’s not realized as far as I know. Unless I’m missing something.

@BlakeFealy 4 жыл бұрын

I made around $200 of short term gains on multiple individual stocks and ETFs that I have since sold so far, but I had a $400 loss on AMC stock (long term) at the beginning of the year which I sold. I wonder if my $400 loss will counter my taxes on my $200 of profit.

@JakeBroe 4 жыл бұрын

Yes, it will. All positive positions sold and negative positions sold will be offset before you determine your taxes due.

@trevormatthews6518 3 жыл бұрын

And sorry to bug ya again, but i keep seeing that you cannot buy back same/similar stocks within 30 after. But nobody goes into depth about the 30 days before part. Does this mean I cannot claim tax loss harvesting if I bought that stock within 30 days of the sale as well? I.E. if i sell at a loss before new year a stock I bought in December is that loss not eligible to offset gains as well?

@JakeBroe 3 жыл бұрын

That is correct (I believe). If you sell (at a loss) and then buy it back within 30 days, it doesn't matter when the tax year ended. You will resume your old cost basis for your shares and then cannot claim a loss on your taxes (or it won't reflect until next year). This is all automatically calculated by your brokerage.

@trevormatthews6518 3 жыл бұрын

I meant if you bought shares within 30 days prior to selling as well. I thought i saw something about 30 days before and/or after, 60 day window. I hope that's not correct.

@dsigntodiefor1026 3 жыл бұрын

@@trevormatthews6518 i have the same question

@dsigntodiefor1026 3 жыл бұрын

@@JakeBroe can you claim the loss if you only held the position a few days and then exited for a loss? Or does the 30 day rule apply. Say you never repurchased a position.

@marabuto941 3 жыл бұрын

How does harvesting work with ordinary income if your already getting money back?

@JakeBroe 3 жыл бұрын

Hey! I am not sure what you mean by ordinary income? Do you mean qualified dividends? Anything in your brokerage account (either the same or multiple) cancels each other out by the end of the calendar year for tax purposes.

@sharhful 2 жыл бұрын

I’ve watched multiple videos about this and still don’t see the advantage to doing this lol. Wouldn’t it be a wash sale if you sold coke for a loss then bought Pepsi in a few weeks?

@JakeBroe 2 жыл бұрын

No, Coke and Pepsi are different companies. So it is not a wash sale.