Cultivate Tax Losses to Offset Gains During the Year
Like equities, taxable bonds produce capital gains every time the fund manager buys or sells securities, as this Fidelity article makes clear.
Cultivate Tax Losses to Offset Gains During the Year
The great thing about this tax strategy is, you donb t have to b dob anything, in the same sense as some of these other strategies where you have to withdraw money, adjust your investment portfolio, or make other difficult choices. Here, you can keep the same investment plan you have now. You just have to finesse it more often.
Tax cultivation means, in a nutshell, the process of balancing realized gains with losses that occur in the same year.
Most years, some equities gain in value while others lose. If you have a wealth manager who stays on top of this, you can use your losses to reduce the taxes you owe on the gains. By effectively managing your gains and losses, you can reduce the taxes you owe.