Tax-loss harvesting can be a Smart Money approach to end-of-year tax planning, our columnist says, but it can be complex.
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Q: We have a number of investments through Vanguard — small, mid and large cap, some real estate and bonds. All have low costs. Our adviser, from another provider, recently suggested we rebalance, moving some small- and mid-cap to large-cap funds. She said we should do this via “loss harvesting.” I have tried to read up and look at the funds online to figure what funds would be smart to sell. But the information provided is confusing (and seems to change), and it seems somewhat complicated. Any advice on how best to proceed, such as what metrics to base the decision on?
— B. Dempsey, San Antonio
A: The goal of tax-loss harvesting is, through a careful series of sales, to offset gains you realize from selling an asset with…
