Tax Loss Harvesting Assistant Calculator
Calculate tax loss harvesting assistant with our free tool. Get data-driven results, visualizations, and actionable recommendations.
Formula
Tax Savings = (Loss Offsetting Gains x CG Rate) + (min(Remaining, $3000) x Income Rate)
Realized losses first offset capital gains dollar-for-dollar at the applicable capital gains rate. Remaining losses offset up to $3,000 of ordinary income at your marginal tax rate. Any excess carries forward to future years. The net benefit subtracts estimated transaction costs from immediate tax savings.
Worked Examples
Example 1: Offsetting Capital Gains
Problem: You bought stock for $50,000, now worth $35,000. You have $10,000 in realized capital gains this year. You are in the 24% tax bracket, short-term holding.
Solution: Unrealized Loss: $50,000 - $35,000 = $15,000\nGains Offset: min($15,000, $10,000) = $10,000\nTax Savings (gains): $10,000 x 24% = $2,400\nRemaining Loss: $15,000 - $10,000 = $5,000\nOrdinary Income Offset: min($5,000, $3,000) = $3,000\nTax Savings (income): $3,000 x 24% = $720\nCarryforward: $5,000 - $3,000 = $2,000\nImmediate Savings: $2,400 + $720 = $3,120
Result: Harvest recommended | Immediate savings: $3,120 | Carryforward: $2,000 (1 year)
Example 2: Small Loss with No Gains to Offset
Problem: You bought a fund for $20,000, now worth $18,000. No capital gains this year. 32% tax bracket, long-term holding.
Solution: Unrealized Loss: $20,000 - $18,000 = $2,000\nGains Offset: $0 (no gains)\nOrdinary Income Offset: min($2,000, $3,000) = $2,000\nTax Savings: $2,000 x 32% = $640\nTransaction Cost: $18,000 x 0.2% = $36\nNet Benefit: $640 - $36 = $604
Result: Harvest recommended | Net benefit: $604 | Loss applied to ordinary income
Frequently Asked Questions
When is tax-loss harvesting most beneficial?
Tax-loss harvesting provides the greatest benefit in these situations: when you have significant realized capital gains to offset (from selling appreciated stocks, mutual fund distributions, or business sales), when you are in a high tax bracket (24%+ federal), when losses are substantial enough that the tax savings exceed transaction costs, and when you can maintain equivalent market exposure through substitute investments. The strategy is particularly valuable in volatile markets where temporary paper losses can be converted to real tax benefits. Year-end is the most common time, but opportunities arise throughout the year. High-income investors in the 37% bracket save $0.37 per dollar of short-term loss harvested.
What are the risks and downsides of tax-loss harvesting?
While generally beneficial, tax-loss harvesting has some caveats. Transaction costs (commissions, bid-ask spreads) reduce the net benefit, though with commission-free trading this is minimal. If you violate the wash sale rule, you lose the current deduction. The new lower cost basis means larger gains when you eventually sell, so tax-loss harvesting defers taxes rather than eliminating them entirely (unless you donate the shares or hold until death for a stepped-up basis). Frequent trading creates complexity at tax time and requires careful record keeping. The strategy also requires discipline to sell losing positions, which can be psychologically difficult. Finally, if your tax bracket changes significantly in the future, the deferred benefit may be at a different rate.
Does Tax Loss Harvesting Assistant Calculator work offline?
Once the page is loaded, the calculation logic runs entirely in your browser. If you have already opened the page, most calculators will continue to work even if your internet connection is lost, since no server requests are needed for computation.
Is Tax Loss Harvesting Assistant Calculator free to use?
Yes, completely free with no sign-up required. All calculators on NovaCalculator are free to use without registration, subscription, or payment.
Is my data stored or sent to a server?
No. All calculations run entirely in your browser using JavaScript. No data you enter is ever transmitted to any server or stored anywhere. Your inputs remain completely private.
Can I share or bookmark my calculation?
You can bookmark the calculator page in your browser. Many calculators also display a shareable result summary you can copy. The page URL stays the same so returning to it will bring you back to the same tool.