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It’s time to sell your losing stocks held in taxable accounts

Most people saw nice returns this year if they stayed with their portfolio that lost heavily last year. However, you may still have some losers within your portfolio that you should now sell in order to take advantage of losses to offset capital gains. For example, let’s say within your portfolio of 10 different company stocks, you had 8 winners which posted gains, while the other 2 may lost money. If you sell those losers now, you can take those losses against your capital gains for the year, thus decreasing your tax liability. You can deduct up to $3,000 if married or $1,500 if filing separately and or individually. Anything over and above that loss threshold you can carry over and claim on your subsequent year’s taxes.

It doesn’t make sense to do this for just any losing stock, especially if you feel the investment is a good one. Truly, you only want to do this if your quite certain the investment was a bad one.

Not to mention, current capital gains rates are at 15%, it’s certainly possible with the new administration that these rates will increase over the next several years, thus enabling you to take excess losses against gains over the next few years.