What Is Tax Harvesting

Thu, 16 Apr 2026 13:20:50 +0000

**What Is Tax Harvesting? The Growing Strategy Shaping Investment Choices in the US** Ever wonder why savvy investors adjust their portfolios each year without selling—keeping tax efficiency in mind? This quiet financial technique, known as tax harvesting, is increasingly discussed among homeowners, retirement planners, and digital-native investors. It’s not a new concept, but rising tax complexity and market volatility are driving sharper focus on how to minimize liabilities while growing wealth. What Is Tax Harvesting? At its core, tax harvesting is a strategic process investors use to offset capital gains—profits earned from selling appreciated assets—by selling investments that have declined in value. By realizing losses, investors generate deductible tax losses that can counterbalance taxable gains, reducing overall tax obligations. The strategy leans on core tax rules allowing investors to deduct up to $3,000 in annual investment losses against ordinary income, with unused losses carried forward to future years.