Tax-Loss Harvesting

Selling losing investments to offset taxable gains.

Tax-loss harvesting involves deliberately selling investments at a loss to offset realized gains and reduce taxes, then often reinvesting in a similar asset. The wash-sale rule blocks buying back the identical security within 30 days. It can meaningfully boost after-tax returns.

Through tax-loss harvesting, she sold a losing fund to offset her gains, then bought a similar one.