Weekend Reading: Don’t Rule Out Tax-Loss Selling as 2023 Winds Down

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend reading tax loss selling 2023 Weekend reading tax loss selling 2023
Weekend Reading

You have much to gain from tax-loss harvesting during volatile times, but even amidst the market’s 15 percent increase year-to-date, tax-selling opportunities still exist. Bonds in particular have underperformed and could be offset by gains elsewhere.


Considerations for tax-loss selling: You should first pinpoint holdings trading below their cost basis. Your cost basis is the total amount you originally invested, plus any commissions or fees included in your investment purchase. Capital losses from selling securities below their cost basis can offset taxable gains or be used to reduce ordinary income up to $3,000. Potential investments to consider in a tax-loss sale include:

📌 Bond funds and ETFs, newly purchased individual bond positions: Interest rate increases have decreased bond prices, offering opportunities for tax-loss selling in long-term bonds and bond funds.

📌 Individual stocks: Despite overall market gains, individual stocks in sectors such as energy, utilities, real estate and healthcare have experienced widespread losses.

📌 Non-U.S. stock funds: Some non-U.S. equity fund categories have sustained losses over one-and three-year periods.

📌 Sector funds: Certain sector-specific funds like equity precious-metals and utilities have posted losses, creating potential tax-loss sale opportunities.

Your portfolio is most likely up this year. However, that doesn’t mean you should ignore the opportunity to harvest some tax losses, along with some gains for that matter.