Tax Gain/Loss Harvesting

Posted in Finance, Accounting and Economics Terms, Total Reads: 697

Definition: Tax Gain/Loss Harvesting

Tax gain/loss harvesting is a concept in finance where to get capital gains in tax liability, you have to sell the securities at a price which is lower. These are useful for people who want to do tax planning as they end up reducing certain amount of tax.

This strategy, in other words, means to sell stocks, bonds, and mutual funds that have been losing value to assist in reducing taxes on capital profits from successful investments. 

Most often, it is considered beneficial to delay the realization of capital profits as long as possible. As a result, tax-gain harvesting is more often than not counter-intuitive and hence talked about less frequently.

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