How Tax Loss Harvesting Works -- Turn Lemons Into Lemonade

By Eric Cuka – Jul 15, 2022 at 7:00AM

NYSEMKT: VOO

Vanguard S&P 500 ETF

Market Cap

Today's Change

(1.00%) $4.63

Current Price

$467.21

Price as of April 26, 2024, 4:00 p.m. ET

Here's an investment strategy that allows you to purge losers without tax ramifications.

Tax loss harvesting allows you to turn lemons into lemonade by eliminating negative stocks from your portfolio while avoiding taxes. However, you have to be careful of wash sale rules. For example, selling Vanguard S&P 500 ETF (VOO 1.00%) at a loss and buying SPDR S&P 500 ETF Trust (SPY 0.95%) before 30 days.

Please watch the below video to learn:

What tax loss harvesting is
How wash rules work
Pros and cons of tax harvesting
Tax loss harvesting rules
Examples of how to tax harvest

*Stock prices used in the below video were during the trading day of July 14, 2022. The video was published on July 14, 2022.

Eric Cuka has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Nio Inc. and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy. Eric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.