Thinking about taxes can feel like a low priority in a year when
so many people were forced to deal with the fallout of an economy
in flux. It's hard to imagine anyone whose life and finances
were not disrupted this year.
Now is the time to put the lid on 2020 and get ready for the
challenges of a new year. Here are three questions to ask your
advisor before you get busy with the holiday season and the Dec. 31
deadline for taxes arrives.
1. Is this a smart time to sell the losers in my
portfolio?
Divorce yourself from emotion and take a hard look at the
holdings in your investment portfolio. Now might be the time to
take advantage of a strategy called "tax-loss selling".
The idea is that you sell chronic losers that no longer fit with
your long-term plan and have lost value. By selling an investment
that has lost value, you can claim a capital loss. From a tax
perspective, losses cancel out gains, resulting in a smaller tax
bill. This strategy makes sense
