Tax-gain harvesting takes advantage of unused low tax rates to increase basis and reduce future taxes. Tax-gain harvesting can reduce taxes significantly more than tax-loss harvesting due to the limited amount of losses that can be deducted and wash sale rules.

I have published on tax-loss harvesting in the past where I outlined the severe restrictions placed on tax-loss harvesting. There are even instances where tax-loss harvesting can increase your taxes!

Tax-Gain Harvesting Review First

A quick review of tax-loss harvesting before examining the benefits of tax-gain harvesting.

First, you can’t just sell a stock at a loss and immediately buy it back. That is a wash sale and the loss is disallowed. Your loss is suspended when you buy an identical or substantially identical stock within 30 days before or after the stock sold at a loss.

You can’t sell a stock at a loss in non-qualified account and then buy it back in your IRA, Roth or traditional, either, within 30 days and still get the deduction.…