Gains & Business Sales
Tax-Loss Harvesting
- Typical userInvestors with taxable brokerage accounts
- IRS scrutinyGreen
- Sponsors0
Overview
Sell investments at a loss to offset gains, subject to the wash-sale rules.
IRS scrutiny
Widely used and generally accepted when the rules are followed.
Rules, risks and sources
Key risks
Wash-sale rules disallow a loss when substantially identical securities are bought within 30 days before or after the sale. Treasury and the IRS flagged certain 'tax-aware' fund strategies and ETF '§351 conversion' transactions as potentially abusive (Notice 2026-62) and ruled that a planned §351 ETF conversion is a taxable exchange (Rev. Rul. 2026-20); the notice says ordinary year-end loss harvesting in a directly held index portfolio is a long-standing technique.
Primary sources
- IRS Topic No. 409, Capital gains and losses
- IRS Notice 2026-62
- Rev. Rul. 2026-20
- Internal Revenue Bulletin 2026-43
Facts checked 2026-10-20.
Sponsors that offer this strategy
None listed yet.
Advisors who offer this strategy
- Allworth Financial Unclaimed SEC-registered investment adviser (CRD 111167) Public record
Education only; not tax, legal or investment advice. Listing here is not a recommendation.