‘Tis the season for tax-loss selling. As the year winds down investors often have an eye toward the taxable capital gains they incurred during the year. When possible, you can sell securities that have losses to offset those gains, wiping out the taxation on the gains.
At Parsec we routinely look at the gains our clients incur, and try to offset with losses. There aren’t always losses that can be taken, and sometime even when there is a loss, we don’t necessarily want to sell that particular security because we like its future prospects too much to sell it.
It’s important to keep perspective on capital gains. Nobody likes to pay taxes, but realizing that the gains are due to money that you made on your investment makes it easier to swallow. Also, the capital gains tax rate is relatively low, lower than many taxpayers marginal tax bracket.
Harli L. Palme, CFA, CFP®