Standard & Poor’s (S&P) publishes financial research and analysis on stocks and bonds. The S&P is still down 32% from its peak in 2007, but it is starting to gain ground. So if you still have losses in your portfolio, take advantage of those losses. If you sell a bond, bond, or fund in a taxable account for less than you paid, you can take the losses, offset your gains and deduct up to $3,000 in losses from regular income. But if the losses are more than $3,000, don’t just toss them aside. Save them as the rest can be used on future tax returns.
There are conditions, so be careful. For example, you can’t buy an investment that is “substantially identical” within 30 days before or after the sale, because it’s considered a “wash sale,” so then the loss is disqualified. So, for example, you can’t trade S&P 500-tracking funds. But there are funds you can switch to, like one following another index, and you can trade one actively managed fund for another.
