Core Insights - The article emphasizes the importance of planning for tax season early, particularly through strategies to reduce tax bills [1] Tax-Loss Harvesting Strategy - Tax-loss harvesting involves selling assets that have decreased in value to lock in capital losses, which can be claimed on taxes [2] - There are two primary benefits of this strategy: offsetting capital gains and reducing regular W-2 income by up to $3,000 [3] Wash-Sale Rule - The wash-sale rule prohibits repurchasing the same or substantially identical asset within 30 days before or after selling at a loss, but allows for investment in different assets during this period [4][5] Investment Candidates for Tax-Loss Harvesting - Digital assets like cryptocurrencies have experienced significant losses, with Bitcoin and Ethereum down 6% and 12% year-to-date, and as much as 29% and 37% from their October 7 highs [10] - Other assets such as Coreweave (CRWV) and Oracle (ORCL) have also seen declines of 45% and 39% from recent highs, respectively [10] Considerations for Investors - The strategy may not be suitable for all investors, particularly those planning to hold assets long-term, as selling could result in missing potential gains [11]
Use this 2025 tax-saving strategy before the end of the year
Business Insider·2025-12-29 10:30