Harvesting doesn't mean abandoning the position
Selling at a loss and buying a similar-but-not-identical fund (a different index provider tracking the same market, say) keeps you invested while banking the loss — as long as it's not "substantially identical" under the wash-sale rule. Deciding what to sell at a vesting event? See the RSU & Stock Options Tax Calculator.
Frequently asked questions
How much loss can offset ordinary income?
Up to $3,000 per year for single filers and married filing jointly ($1,500 if married filing separately). Losses first offset any capital gains dollar-for-dollar with no limit — the $3,000 cap only applies to what's left after that.
What happens to a loss bigger than the cap?
It carries forward indefinitely to future tax years, offsetting future gains and up to $3,000 of ordinary income each year until it's used up.
What is the wash-sale rule?
The IRS disallows the loss if you buy the same or a "substantially identical" security within 30 days before or after the sale — the loss is added to the new position's cost basis instead of being usable now. Wait at least 31 days, or buy a similar-but-not-identical fund, to keep the loss.
Last updated: June 2026