Tax-Loss Harvesting

Tax-loss harvesting is an investment strategy used to minimize taxable capital gains by selling underperforming or loss-generating assets. The realized losses can offset capital gains from other investments, thereby reducing the overall tax liability. If losses exceed gains, up to $3,000 of the excess can offset ordinary income, with any remaining losses carried forward to future tax years. For family offices, this strategy is critical in optimizing after-tax returns, preserving wealth, and managing cash flow efficiently. It requires careful planning to comply with tax regulations, such as avoiding wash-sale rules, which disallow the repurchase of a substantially identical asset within 30 days of the sale.