Ryan VaughnCOO of Incite Tax & Accounting. Ask me anything about your taxes.

Pay Taxes Like The Rich Strategy 3 | Incite Tax

29 Mar 2024 · 1 min

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In this segment, Ryan Vaughn explains a tax‑saving technique called tax loss harvesting. He describes how investors can sell assets—whether public stocks or private company equity—at a loss and use the loss to offset capital gains, taking advantage of the IRS rule that permits a $3,000 annual deduction of net capital losses. Vaughn also notes that investors can acquire private‑company equity with little or no cash outlay through specialized programs, expanding the pool of assets that can be used for loss harvesting. By strategically pairing loss‑generating sales with gain‑generating sales, taxpayers can reduce their taxable income and keep more of their investment returns.

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take advantage of this strategy. It's called tax loss harvesting. So if I have investments, and most people buy stock, but the reality is you can buy private stock in actual companies that have equity in those companies, or if you follow programs from some really smart people, you can actually get equity in businesses with no money down. If I have an investment, whether that's a stock or a business, and it gets sold at a loss, The default rule is that I'm allowed to take $3,000 a year of that loss until the loss no longer exists. So I can do tax loss harvesting where if I have an investment loss here, I can sell other investments that I have that have gained money. I sell that. Now I have the capital gain on this side of the equation, but I have my loss over here. So I'm basically forcing some gains to offset the loss.