[sulam]

How much money do you have in Vanguard? I guarantee you will save from TLH if you have assets north of $1M. My annual tax burden has been reduced by 6 figures each year due to taking losses intelligently.

[mikedouglas]

How? There's a $3000 cap on THL against regular income and capital gains is only taxed at 15%. $1M in realized capital gains is a pretty extraordinary circumstance.

[mrkurt]

The cap is on deductions from regular income if you have a capital loss for a year.

So if you have $50,000 in capital gains and $53,000 in capital losses, your gains are "free". And you can deduct the extra $3k from ordinary income.

You can also carry capital losses forward each year.

[dragontamer]

Yeah. If you have $50,000 in gains but $53000 in losses, then that's called a bad year.

You still aren't getting around the fact that you made a crappy investment somewhere to generate that loss.

[sulam]

Every portfolio has a mix of gains and losses if it's well diversified. I have gains that offset the losses elsewhere, but a reasonable chunk of those gains is offset by losses realized in parts of the portfolio that didn't do so well.

If you have a diversified portfolio that is all gains, I think you're probably not actually diversified.

[dragontamer]

Vanguard total market.

Diversified, but generally speaking it gains every year.

And no. Your portfolio is not as diverse as the entire market. Period.

[sulam]

Of course it isn't. But which market?

Anyway, we are talking past each other.

[mrkurt]

That's not really how tax loss harvesting works. You can have a portfolio that's up a total of $50k and _still_ have $50k in losses.