Need a user ID? Set up online banking
Smart investors know how to capitalize on loss. When done strategically, selling investments at a loss can reduce your annual tax bill. The IRS allows a deduction of up to $3,000 in capital losses each year. It’s a process known as tax-loss harvesting, and it helps investors keep more of the money they earn from investing. Here’s how: Let’s say you’ve invested in Security A and Security B. At year-end, you sell Security A for a gain of $7,000. If the gain is taxed at 15%, the tax bill is $1,050. Then, if Security B has an unrealized loss of $3,000, you can sell to realize the loss and apply that amount against profits from Security A, leaving you with a taxable gain of $4,000. If that gain is taxed at 15%, your new tax bill would be $600. In this scenario, tax-loss harvesting saved $450, which can then be reinvested. Doing tax-loss harvesting yourself takes a lot of time, but the Truist Invest technology automatically harvests losses on accounts with $20,000 or more. To learn more about Truist Invest and to get started, visit Truist.com/invest.