Tax-Loss Harvesting Calculator 2025
Calculate your tax savings from harvesting capital losses. Includes $3,000 ordinary income deduction limit, carry-forward analysis and wash sale rule guidance.
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Total Tax Saving (Current Year)
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Net Gain After Harvesting
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Ordinary Income Deduction
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Loss Carry-Forward
Loss Netting Breakdown
How to Use This Tax-Loss Harvesting Calculator
Enter your capital gains (from sales already made or planned) and the capital losses you could harvest by selling underperforming positions. The calculator applies IRS netting rules: short-term losses first offset short-term gains, long-term losses first offset long-term gains, then the net amounts cross-offset each other.
If you end up with a net capital loss, up to $3,000 can be deducted against ordinary income; the rest carries forward.
The Formula
Step 1: Net ST = ST Gains β ST Losses
Step 2: Net LT = LT Gains β LT Losses
Step 3: If both positive β pay tax on each at respective rates
Step 4: If one positive, one negative β cross-offset the two nets
Step 5: If net result is a loss β Deduct up to $3,000 against ordinary income; carry forward excess
Tax Saving = Gains Eliminated Γ Applicable Rate + Ord. Deduction Γ Marginal Rate
Step 2: Net LT = LT Gains β LT Losses
Step 3: If both positive β pay tax on each at respective rates
Step 4: If one positive, one negative β cross-offset the two nets
Step 5: If net result is a loss β Deduct up to $3,000 against ordinary income; carry forward excess
Tax Saving = Gains Eliminated Γ Applicable Rate + Ord. Deduction Γ Marginal Rate
Example
Jordan, 22% bracket, $15K ST gains, $20K LT gains, $10K ST losses, $30K LT losses:
Net ST: $15K β $10K = +$5K
Net LT: $20K β $30K = β$10K
Cross-offset: $5K ST gains β $10K LT losses = β$5K net loss
Ordinary income deduction: $3,000
Carry-forward: $2,000
Tax savings: $20K LT gains eliminated Γ 15% = $3,000 + $3,000 Γ 22% = $660
Total saving: $3,660
Net ST: $15K β $10K = +$5K
Net LT: $20K β $30K = β$10K
Cross-offset: $5K ST gains β $10K LT losses = β$5K net loss
Ordinary income deduction: $3,000
Carry-forward: $2,000
Tax savings: $20K LT gains eliminated Γ 15% = $3,000 + $3,000 Γ 22% = $660
Total saving: $3,660
Extended
Wash Sale Rule & Carry-Forward Planner
Understand wash sale restrictions and project your multi-year carry-forward benefit
Understand wash sale rules and project the value of your carry-forward losses over multiple years.
Wash Sale Rule β What You Cannot Do
| Situation | Allowed? | Consequence |
|---|---|---|
| Sell stock at a loss, buy same stock 31+ days later | Yes | Loss allowed |
| Sell stock at a loss, buy same stock within 30 days after | No | Loss disallowed; added to cost basis of new shares |
| Sell stock at a loss, buy same stock 30 days before | No | Loss disallowed; wash sale window is 61 days total |
| Sell ETF at a loss, buy similar (not identical) ETF immediately | Yes | Loss allowed; maintain market exposure |
| Sell stock at a loss in taxable account, buy same stock in IRA within 30 days | No | Loss disallowed; IRA purchase counts |
| Sell Bitcoin at a loss, rebuy immediately (2025) | Yes | No wash sale rule for crypto currently |
| Sell losing position, spouse buys same stock | No | Wash sale applies to household |
Carry-Forward Loss Utilization (Projected)
Based on your carry-forward amount, assuming $20K annual capital gains going forward
| Year | Carry-Forward Used | Remaining Carry-Forward | Tax Saving |
|---|
Frequently Asked Questions
What is tax-loss harvesting?
Tax-loss harvesting is the strategy of selling investments that have declined in value to realize capital losses. These losses offset capital gains, reducing your tax bill. If losses exceed gains, up to $3,000 of net losses can be deducted against ordinary income each year, with any remaining losses carried forward to future years. It is most effective in taxable brokerage accounts.
What is the wash sale rule?
The wash sale rule prevents you from claiming a tax loss if you purchase the same or substantially identical security within 30 days before or after the sale (a 61-day window total). If you violate the wash sale rule, your loss is disallowed, though the disallowed loss is added to the cost basis of the repurchased security, preserving it for future use. Cryptocurrencies are currently not subject to the wash sale rule.
How much can I deduct from tax-loss harvesting?
Capital losses first offset capital gains of the same type (short-term losses against short-term gains, long-term losses against long-term gains). If losses exceed gains, up to $3,000 of net capital losses can be deducted against ordinary income per year. Remaining losses carry forward indefinitely and can be used in future tax years. There is no limit on how much can be carried forward.
Does tax-loss harvesting make sense in all tax brackets?
Tax-loss harvesting is most valuable in higher tax brackets. In the 10% or 12% bracket, long-term capital gains already face a 0% rate, so there may be little benefit. In the 22%β37% brackets, converting a taxable gain into a deferred or eliminated tax liability provides significant value. The strategy also has a timing benefit β even if you eventually pay the same tax, paying it later gives your money more time to compound.
Can I harvest losses in my IRA or 401(k)?
No. Tax-loss harvesting only works in taxable brokerage accounts. Transactions inside IRAs, 401(k)s and other tax-advantaged accounts do not generate reportable capital gains or losses β they are all tax-deferred (traditional) or tax-free (Roth). The wash sale rule applies across all accounts, including IRAs, so selling at a loss in a taxable account and buying the same security in an IRA within 30 days disallows the loss.