How Tax Loss Harvesting Works

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Simple investing, with Truist Invest)

Smart investors know how to capitalize on loss.

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When done strategically, selling investments at a loss can reduce your annual tax bill. The IRS allows a deduction of up to $3,000 in capital losses each year.

It’s a process known as tax-loss harvesting, and it helps investors keep more of the money they earn from investing.

(Visual Description: Less tax, More earnings)

Here’s how: Let’s say you’ve invested in Security A and Security B.

At year-end, you sell Security A for a gain of $7,000. If the gain is taxed at 15%, the tax bill is $1,050.

Then, if Security B has an unrealized loss of $3,000, you can sell to realize the loss and apply that amount against profits from Security A, leaving you with a taxable gain of $4,000.

If that gain is taxed at 15%, your new tax bill would be $600. In this scenario, tax-loss harvesting saved $450, which can then be reinvested.

Doing tax-loss harvesting yourself takes a lot of time, but the Truist Invest technology automatically harvests losses on accounts with $20,000 or more.

To learn more about Truist Invest and to get started, visit Truist.com/invest.

Disclosure:

Investment Advisory services, including Truist Invest, are offered by Truist Advisory Services, Inc., a SEC registered investment adviser affiliate of Truist Financial Corporation.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Any comments or references to taxes herein are informational only. Truist and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences.

Truist Invest technology cannot “see” into other investment accounts held by clients, so wash sales can still occur thought other accounts.

Investment and Insurance Products:

•Are not FDIC or any other Government Agency Insured

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• May Lose Value

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