Tax Loss Harvesting; It’s A Good Thang

Dear ContraFolk,

We are also beginning to trigger our year-end tax loss selling on our short ETFs.  By tax planning today, and triggering our capital losses by selling our positions that remain underwater, we can cut our portfolio losses by claiming refunds on past capital gains taxes paid (at our top marginal tax rates) on capital gains/losses in the past, present, or even the future.

Tax-loss Harvesting; It’s A Good Thang

These tax losses will then be carried back 3 years (forward indefinitely) to offset any capital gains tax paid in those years – and note any excess can usually be carried forward.

By switching between the US shares and the CDN short shares ETF, one can maintain (or rebuild or destruct) a hedged (short) position without triggering superficial loss rules.

In the end, we will receive a tax refund to redeploy early in the new year.  Either way, getting tax refunded is a good thing in any year – but this year, it will be especially valuable as a bonus part of your investment plan.

Nothin’ like using other people’s money.



About ContraManFund

Fictional (maybe not if you are an accredited investor) trading of a long/short contrarian-driven investment model portfolio based upon current economic environments and counter-intuitive trends. Legal Disclaimer The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions. NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES. The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility. Please consult your own investment advisor before making any investments anywhere, and always do your own due diligence before undertaking any individual investment.
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