Tax Gain Harvesting: Don't Forget about 0% on Cap Gains and Qualified Dividends

Yes, you read that correctly. When it comes to investing, there aren’t many times when zero is the number you’re hoping to see. However, when it comes to paying taxes on your investments, it doesn’t get much better. Near the end of each year, we tend to talk a lot about tax loss harvesting. It’s a popular use of ETFs, where an investor sells an underperforming stock or fund at a loss, buys an ETF with a similar exposure and risk profile, and holds the ETF for the 30 day “wash sale” period during which they’re prohibited from re-purchasing the original security in order to claim the loss for tax purposes. The strategy is designed to capture the capital loss and possibly lower taxes for the year, while maintaining exposure to the intended security or asset class. (By the way, this is a good strategy to use anytime throughout the... Read more