Two weeks ago we talked about delaying your taxes by waiting to recognize a gain if possible to save money. If you agree with that logic, then the flip side is also true! Let’s talk about.
It sucks to lose money. It sucks even more to lose more money than you had to by not claiming your tax losses. And if you have tax losses, its better to claim them sooner than later. (The question here is who is getting the 0% loan, you or the government?)
As we get to the end of the year, chances are running out to use tax losses to offset taxable income and lower your overall tax bill.
An investment can be profitable overall and still have a tax loss to harvest. Just check this blog post out.
Don’t Be This Person:
Something I’ve heard about from colleagues is that they’ve been holding positions that they don’t believe in hoping that there’s some sort of turnaround (but their tone says much about their optimism).
Consider that position objectively. If you had that money in cash today, would you put it in that same stock or investment? If not, claim the loss and move on… ideally to more profitable ventures :).