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Tax Loss Harvesting

How selling investments at a loss cuts your tax: offsetting short- and long-term gains, the $3,000 yearly deduction, carryforwards, the wash sale rule, and a calculator for your savings.

Updated November 4, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

Tax loss harvesting calculator

Short-term gains this year ($)Long-term gains this year ($)Short-term losses you could harvest ($)Long-term losses you could harvest ($)Loss carried over from last year ($)

Your ordinary tax rate (%)Your long-term capital gains rate (%)Filing status

Estimated tax saved by harvesting

–

–Net short-term gain left

–Net long-term gain left

–Loss deducted from ordinary income

–Loss carried to next year

How tax loss harvesting works

Tax loss harvesting means selling investments that are down to realize a loss, which offsets gains you've realized elsewhere. Short-term losses first offset short-term gains and long-term losses offset long-term gains; any net loss in one group then offsets net gain in the other. If losses exceed gains, you can deduct up to $3,000 a year ($1,500 married filing separately) against ordinary income, and carry the rest forward to future years with no time limit (IRS Topic 409).

Example: $5,000 of short-term and $10,000 of long-term gains, taxed at 24% and 15%, cost $2,700. Harvest $4,000 of short-term and $14,000 of long-term losses: the gains are wiped out and $3,000 more is deducted from ordinary income (another $720), so you save about $3,420 this year.

The wash sale rule

You can't deduct a loss if you buy the same or a substantially identical investment within 30 days before or after the sale (61 days in all), including in an IRA or your spouse's account. The disallowed loss is added to the cost basis of the new shares instead, so it isn't lost forever, just delayed (IRS Publication 550). Many investors switch to a similar but not identical fund (for example a different index) to stay invested.

When harvesting helps most

When you have short-term gains, taxed at ordinary rates up to 37%.
In high-income years; losses carried forward can offset future gains.
Not in the 0% long-term bracket: if your gains would be taxed at 0%, harvesting losses saves nothing on them.
Only in taxable accounts; losses inside IRAs and 401(k)s can't be deducted.

To see the tax on a sale, use the capital gains tax calculator.

Common questions

How much in losses can I deduct per year?

Up to $3,000 against ordinary income ($1,500 married filing separately), after offsetting all capital gains; the rest carries forward.

What is the wash sale rule?

A loss isn't allowed if you buy substantially identical stock or securities within 30 days before or after the sale; it's added to the new shares' basis.

Do capital loss carryovers expire?

No, for individuals they carry forward until used.

Can I harvest losses in my IRA?

No; losses inside tax-advantaged accounts aren't deductible.

Sources

More investing and trading calculators: Net Investment Income Tax · Real Estate Investment Trust (REIT) · Unrelated Business Taxable Income · Cash-Secured Put Calculator

General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.