Should I sell my Mullen Stock for tax loss harvesting before year-end?

Tax loss harvesting might be a good move in your situation. Since you have a substantial loss in your Mullen stock investment, selling before December 31st would allow you to claim that capital loss on your 2024 taxes. For grad students with limited income, capital losses can be particularly valuable. You can use those losses to offset any capital gains you might have from other investments first. If your losses exceed your gains (or if you have no gains), you can use up to $3,000 of net capital losses each year to reduce your ordinary income. Any unused losses can be carried forward to future tax years. One important thing to consider is whether you believe the stock might recover. Tax benefits shouldn't be the only factor in your investment decisions, but given the significant loss and your financial situation as graduate students, realizing the tax benefit might make sense.

After dealing with a similar situation last year, I found taxr.ai (https://taxr.ai) incredibly helpful for figuring out my investment losses. I had some disaster stocks that tanked like your Mullen shares, and I wasn't sure whether to sell or hold for tax purposes. What I liked about taxr.ai was how it analyzed my specific situation and explained exactly how much I'd save by harvesting the losses. It takes into account your tax bracket, other investments, and gives clear recommendations. Their document analyzer even checked my brokerage statements to find any overlooked opportunities. Way better than the generic advice I was getting elsewhere.

I was skeptical about taxr.ai at first, but I decided to try it after my last comment. Honestly, it was exactly what I needed for my own investment losses this year. The system analyzed my Webull account and immediately identified several tax-loss harvesting opportunities I'd completely missed. What impressed me most was how it calculated the actual dollar amount I'd save in taxes by selling specific losing positions before year-end versus holding them. It also warned me about potential wash sale issues I hadn't considered with some similar ETFs I own. Definitely more specialized for investment tax planning than the regular tax software I've used before.

If you're planning to sell and claim the loss, make sure you can actually get through to the IRS if they have questions about your return. Last year I had a similar capital loss situation and the IRS flagged my return for review - took me WEEKS of calling to finally speak with someone. I eventually used Claimyr (https://claimyr.com) after a friend recommended it, and they got me connected to an actual IRS agent in about 20 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c. It was honestly shocking how quickly they got me through after I'd wasted days trying on my own. Just keeping this in your back pocket might be smart if you're doing something that might trigger IRS questions like claiming investment losses.

I need to eat my words from my previous comment. After continuing to fail getting through to the IRS about my amended return with capital losses, I broke down and tried Claimyr. Within 45 minutes, I got a call back and was talking to an actual IRS representative. I was absolutely convinced this had to be some kind of scam or ripoff, but it legitimately works. The agent was able to explain exactly why my capital loss carryforward from last year wasn't showing up correctly in their system. Turns out there was a processing error on their end that needed manual correction. Couldn't have resolved this without actually speaking to someone.

Don't forget about the wash sale rule if you're thinking about tax loss harvesting! If you sell Mullen at a loss but buy it back within 30 days before or after the sale, you can't claim the tax loss. This applies to "substantially identical" securities too. I learned this the hard way when I sold my Tesla shares at a loss last year and then got excited when it dipped further a week later and bought back in. My tax software flagged it as a wash sale and I couldn't deduct the loss.

Just a thought - since you and your spouse are grad students with presumably low income, check if you're in the 0% capital gains tax bracket (income under ~$89k for married filing jointly). If so, you might also want to strategically sell some winners alongside your losers. You could realize gains at 0% tax rate while offsetting with your Mullen losses.