3 Easy Strategies to Avoid Capital Gains Tax
The end of the year is a time for reflection, and that also applies to your investment accounts. Many people choose to rebalance their portfolios as the year comes to a close, so it's especially important to know the effect of your trading actions on your tax bill coming in April.
Below, you'll find three easy-to-apply strategies to reduce or even eliminate any potential capital gains tax in 2021.
If you have losses in your taxable brokerage account, you'll be able to offset them against any gains to avoid capital gains tax. First, you'll need to net gains and losses of the same type. For example, short-term gains can only be netted against short-term losses, and long-term gains can only be netted against long-term losses. From there, you'll again net the total to come up with a final number that's reported on your tax return.
Source Fool.com
