Tax-Loss Harvesting Calculator
Tax saved this year by harvesting losses — netting against short- and long-term gains, the $3,000 ordinary-income deduction, carry-forward, the deferred tax from a lower basis, the net benefit over your holding period and the wash-sale window dates.
| Tax on this year’s gains without harvesting | — |
|---|---|
| Netting: losses applied to gains | — |
| Loss used against ordinary income | — |
| Tax this year after harvesting | — |
| Tax saved this year | — |
| Loss carried forward | — |
| Years to use the carry-forward at $3,000 a year (if no future gains) | — |
| The catch: lower basis means more tax later | — |
| Net benefit of deferral (tax saved now, invested) | — |
| Wash-sale window | — |
In short
Harvested losses offset capital gains (short-term against short-term first, then long-term, then across), then up to $3,000 of ordinary income a year, with the remainder carried forward indefinitely. The saving is mainly tax deferral — the replacement position has a lower basis — plus a rate arbitrage when short-term losses offset ordinary income. The wash-sale rule disallows the loss if you buy the same or a substantially identical security within 30 days before or after, in any account.
Who this is for: US investors with taxable brokerage accounts deciding whether to realise losses before year end.
How tax-loss harvesting works
- Netting order: short-term losses offset short-term gains (taxed at ordinary rates up to 37%); long-term losses offset long-term gains (0/15/20%); then any remaining loss offsets the other kind, then up to $3,000 of ordinary income; the rest carries forward indefinitely.
- Most valuable when short-term losses wipe out short-term gains or ordinary income (37% value) — least valuable when long-term losses merely offset 15% gains.
- It is mostly deferral: your replacement shares have a lower basis, so the gain reappears when you sell. The win is the time value of the tax saved, a possible drop in rates by then, and the chance the gain is never taxed (step-up at death, donation).
- Wash-sale rule: no buying the same or substantially identical security 30 days before or after the sale, in any account (including IRAs and a spouse's). Swap S&P 500 for total-market, or one bond fund for a similar one.
- Automate it: robo-advisers and direct-indexing accounts harvest continuously; the biggest gains come in volatile years like 2020 and 2022.
See also: AMT Calculator 2026.
Assumptions
- Netting: same-character first, then cross; up to $3,000 ($1,500 MFS) of net loss against ordinary income; remainder carried forward.
- Tax before and after from the 2026 brackets, long-term rates stacked on ordinary income, NIIT above the threshold.
- Deferred tax = long-term tax on the harvested amount at today's rates; net benefit = saving compounded at the return minus deferred tax.
Worked example
Without harvesting the gains cost about $2,760 ($960 on the short-term gain at 24% and $1,800 on the long-term gain at 15%). The $25,000 loss wipes out the $12,000 long-term gain, then the $4,000 short-term gain, then $3,000 of salary, leaving $6,000 to carry forward. Tax saved this year about $3,480. When the replacement position recovers, about $3,750 of long-term tax is due on the $25,000 — but the $3,480 saved today grows to about $6,850 in ten years, a net gain of roughly $3,100 from deferral plus the rate arbitrage.
Frequently asked questions
How much capital loss can I deduct in 2026?
Unlimited against capital gains, then $3,000 a year ($1,500 married filing separately) against other income; the remainder carries forward indefinitely.
What is the wash-sale rule?
If you buy the same or a substantially identical security within 30 days before or after selling at a loss, the loss is disallowed and added to the basis of the new shares.
Is tax-loss harvesting worth it?
Usually yes when you have gains to offset or short-term losses, because of deferral and rate arbitrage — less so for long-term losses offsetting 15% gains when you plan to sell soon anyway.
Can I harvest losses in an IRA or 401(k)?
No — losses inside tax-advantaged accounts are not deductible, and buying the same security in an IRA can trigger a wash sale on a taxable-account loss.
Does the wash-sale rule apply to crypto?
Not currently — the rule covers stocks and securities, so crypto losses can be harvested and repurchased immediately, though Congress has proposed closing this.
Can I harvest losses in December and buy back in January?
Only if 31 days have passed since the sale; buying back on 2 January after a 15 December sale is a wash sale.
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