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Ihaveamodel3 t1_iuhiz9m wrote

You don’t have any losses unless you sold.

If you did sell and lost $2000, then your income is reduced by $2000 which will likely reduce your tax by about $300. So your refund (not return, return is the piece of paper you file) would increase by $300 to $1300.

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SignificantPen1325 OP t1_iuhklcc wrote

Thank you!

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fnbr t1_iuhn5pu wrote

If you do this, make sure you don’t buy the same security within 30 days or it’s a “wash-loss” and you can’t dedicate the loss from your income.

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justhere321 t1_iuho3yz wrote

There’s also several websites that will help you find comparable funds to avoid wash sales. This looks like a good year for tax loss harvesting.

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Default87 t1_iuhized wrote

if the investment was in a taxable account, and you sold the investment to realize those losses, then yes it will impact your tax return. if these are unrealized losses, they do not impact your tax return.

investment losses arent a tax credit, they are a tax deduction (with limitations in place). so no, it wont work as you outlined in your hypothetical.

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93195 t1_iuho9ue wrote

Not at all.

You don’t have a loss until you sell, and even then, losses are as compared to what you bought it for, not YTD.

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