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8 Stocks to Sell Now to Harvest the Tax Loss


With the stock market volatile of late, this may be a good time to consider “harvesting” investment losses. This age-old tax strategy is aimed at clearing out investment mistakes before year-end. By dumping losing positions in your taxable accounts, you can generate cash to buy better prospects and trigger capital losses that can offset investment gains and up to $3,000 in ordinary income each year. “If you’re a high-income taxpayer, there’s a new capital gains levy this year, so tax loss harvesting is more valuable than ever,” says Philip Holthouse, of the Los Angeles accounting firm of Holthouse Carlin & Van Trigt.

But you should never jettison a loser that you’d want to repurchase quickly. Tax laws bar you from using capital losses if you repurchase the same (or substantially identical) shares within 30 days of the sale.

Stocks of strong companies are likely to recover quickly as Wall Street’s mood improves, but shares of some troubled companies appear likely to languish for months, if not years, to come. The following eight companies may turn around some day, but the near-term prospects seem bleak enough to make them ideal candidates for harvesting tax losses now.

Share prices and returns are as of October 21.

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