On Nov 16, 9:12*am, an_ordinary_guy_...[at]hotmail.com (Bill) wrote:
- quote -

Bill: Sorry there's too many possibilites and I'm tired. I have the
same problem personally (plue several other twists) and I haven't
figured out what to do about it.

ed

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edcosoft[at]sbcglobal.net (ed) posted;

- quote -

But wouldn't those advantages of potential LTCG be reinstated if --
31+days after the harvest -- the investor repurchases any holdings which
appear promising for LT gains?
IOW, harvest now for immediate offset of current taxes due; then
repurchase at lower price for eventual advantageous LT gain. (With due
regard for Wash Sale concerns.)

In this instance, the only danger would be if the specific investment
"takes off" and rises substantially during the 31 days after the
"harvesting" sale.

Bill

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On Nov 15, 6:30*pm, snoll1...[at]gmail.com wrote:
- quote -

You are correct in your 4 assumptions. The *worksheet* will keep the
LT and ST separate for the following year. Your Q divs will probably
still be 0% if the total of them and ordinary income is less than your
25% tax bracket threshold. Note they have no LT gains to take at 0%
if you sell the losers.

Personally I wouldn't *harvest* LT losses. Consider that you have a
free LTCG on them until they increase in value to what you paid for
them. Maybe you should harvest LT gains while they still fall into
the 0% bracket ,and NOT take the losses.

ed

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I am considering selling some mutual funds to harvest capital losses.
The capital losses will be almost entirely long-term. I am trying to
understand how I can use these losses in offsetting capital gains,
dividends, and income. Below is my understanding of the “offsetting”
sequence:

1. First, these losses must be used to offset any long-term gains.
2. Remaining losses can be used to offset short-term gains.
3. Remaining losses can be used to offset up to $3,000 of income.
4. Any remaining losses can be carried forward into future years.

In other words, the maximum benefit in any tax year is 100% of the
capital gains (long and short), plus $3,000 of income (assuming the
loss is at least $3,000 more than all capital gains).

Is the above information accurate?

Also, must I continue to track the losses carried forward as long-term
or short-term and apply them as outlined above in future years?

It appears there is a worksheet related to capital losses and
qualified dividends. Am I correct to assume the tax benefit of any
qualified dividends will be diminished if the capital losses exceed
the capital gains and I use them to offset income?

Are there other considerations?

Since almost all my losses are long-term, I am trying to verify it is
worth the churn of realizing them.

sn

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >