Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #61: Tax Gain Harvesting: What, Why, and How

 

Tax gain harvesting is a strategy of selling investment assets at a gain and paying tax at that point as opposed to waiting and paying the tax later. Depending on your income and how your income may fluctuate in the future, there might be situations where it makes sense to take advantage of tax gain harvesting. Throughout today’s episode, Grant reviews how tax gain harvesting works, when it may be and may not be a good idea, and what you should consider before deciding whether tax gain harvesting might be beneficial in your specific scenario.

 

Show Notes

[01:20] Introduction – Grant reviews the concept of tax gain harvesting, the purpose of it, and how it works.

[02:52] Tax Loss Harvesting – What tax loss harvesting is and the wash-sale rule the IRS has surrounding tax loss harvesting.

[04:27] Long-term Capital Gains – How long-term capital gains work and how taxation applies to different types of tax filing.

[07:34] Roth IRA Conversion and Tax Gain Harvesting – Grant compares the benefits of Roth IRA conversions versus long-term capital gain harvesting and how you can save more according to your financial situation.

[13:33] When not to Harvest – Grant reviews a couple of scenarios where harvesting capital gains may not be the most beneficial choice.

[16:37] The Effects of Harvesting on Other Benefits – There are some benefits, tax credits, and other variables that depend on your adjusted gross income, such as social security and Medicare premiums. Grant explains why you should be mindful about these things since your adjusted gross income increases due to capital gain harvesting.

[21:10] The Political Aspect – Grant shares his take on how the proposed tax policies of newly elected government officials might affect the investment strategies of people who are in higher tax brackets.

 

Resources

Capital Gains and Losses – 10 Helpful Facts to Know:
www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0

How to Take Advantage of Your Retirement “Gap Years”
www.abovethecanopy.us/how-to-take-advantage-of-your-retirement-gap-years/

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