When is the deadline to sell stock for tax loss harvesting - December 31 or earlier?

Thanks for the info! Just to clarify, if I place a limit order that doesn't execute until January 2, that would count for 2026 taxes instead of 2025, correct? And what exactly counts as "substantially identical" securities? If I sell an ETF tracking the S&P 500 and buy a different S&P 500 ETF, would that trigger the wash sale rule?

Yes, if your limit order doesn't execute until January 2, that would count for the 2026 tax year, not 2025. The trade date is what matters, so whenever the transaction actually occurs is the date that counts. The definition of "substantially identical" securities isn't precisely defined by the IRS, which creates some gray areas. Generally, selling one S&P 500 ETF (like VOO) and buying another S&P 500 ETF (like SPY) could potentially trigger the wash sale rule as they track the same index and have very similar performance characteristics. Many tax professionals recommend using ETFs that track different indexes to be safe - for example, selling an S&P 500 ETF and buying a total market ETF. But this is one area where opinions vary somewhat.

That sounds pretty useful. Does it connect directly to your brokerage account? I'm always hesitant to give access to financial accounts to new services.

I've never heard of this before. How much did it cost? Was it worth it compared to just talking to an accountant? I've got some serious losses this year I could harvest but I'm worried about messing up the timing.

The tool doesn't require direct access to your brokerage account - you can upload statements or even manually input your holdings if you're more comfortable with that approach. They're pretty serious about security. It was definitely worth it compared to an accountant consultation for me. My accountant charges hourly and isn't always available for quick questions, while this gave me on-demand analysis whenever I was considering trades. I ended up saving over $3,000 in taxes last year by optimizing my harvesting strategy, which far outweighed the cost of using the service.

Wait, how does this even work? The IRS phone lines are a nightmare. How can they get you through faster than anyone else?

This sounds too good to be true. I've literally spent DAYS of my life on hold with the IRS. If this actually works, it would be a miracle, but I'm extremely skeptical. Anyone else actually tried this?

It works because they use technology to navigate the IRS phone system automatically. Basically, their system calls the IRS and goes through all the prompts and waiting for you, then calls you once they have an agent on the line. It's all explained in the video I linked. I was skeptical too until I tried it. The whole point is they sit on hold so you don't have to. You literally get a call back when there's an actual IRS person ready to talk. It saved me hours of frustration during tax season when I had specific questions about tax loss harvesting deadlines that I couldn't find clear answers to online.

That's a good point about documentation! Would a year-end statement from the broker be sufficient, or would you really need screenshots of each trade?

Year-end statements from your broker are generally sufficient for normal record-keeping. The screenshots are just extra protection if you're making trades literally in the final hours of the year and want to ensure you have timestamp proof if questions ever come up. My CPA recommended the screenshots specifically for December 31 after-hours trading since there can occasionally be discrepancies in how brokers report those trades. Most major brokers are accurate with their reporting, but having your own backup documentation never hurts, especially if you're harvesting significant losses that might attract attention.

Oh no! That's rough. How much did that mistake end up costing you in missed tax savings?

This is such a comprehensive summary, thank you! As someone who's been lurking and learning from this thread, I really appreciate how you've organized all the key points. I'm in a similar boat - have been procrastinating on tax loss harvesting because the rules seemed so confusing, but this discussion has cleared up all my major questions. One thing I'm still wondering about: if I'm harvesting losses from individual stocks, is there a minimum holding period I need to worry about? I know there are short-term vs long-term capital gains rules, but does the same apply to losses? Some of my losing positions I've only held for a few months, while others I've had for over a year. Also, does anyone know if the wash sale rule applies if I sell at a loss in my taxable account but my spouse buys the same stock in their IRA around the same time? We file jointly but have separate investment accounts. Thanks again everyone - this has been incredibly educational!

Great questions! For capital losses, there's no minimum holding period requirement like there is for certain tax benefits. You can harvest losses on stocks you've held for any amount of time. However, the timing does matter for how those losses offset your gains: - Short-term losses (held ≤1 year) first offset short-term gains, then long-term gains - Long-term losses (held >1 year) first offset long-term gains, then short-term gains This is important because long-term gains are taxed at lower rates, so ideally you want to offset short-term gains first when possible. Regarding the wash sale rule with spousal IRAs - yes, this can trigger wash sale treatment! The IRS considers purchases by your spouse or in accounts you control (including IRAs) as triggering the wash sale rule. So if you sell at a loss in your taxable account and your spouse buys the same stock in their IRA within the 30-day window, you wouldn't be able to claim that loss. This is one of the trickier aspects of tax loss harvesting that catches people off guard. To be safe, coordinate with your spouse on any trades during your tax loss harvesting period, including in retirement accounts!

Great questions! For capital losses, there's no minimum holding period requirement - you can harvest losses whether you've held the position for days or years. However, the holding period does matter for how losses offset gains: short-term losses (held ≤1 year) first offset short-term gains, and long-term losses (held >1 year) first offset long-term gains. Any remaining losses can then offset the opposite type. Regarding the wash sale rule with spouse's IRA - yes, this can still trigger a wash sale! The IRS considers purchases in your spouse's accounts (including retirement accounts) as related party transactions. So if you sell at a loss in your taxable account and your spouse buys the same security in their IRA within the 30-day window, it would disallow your loss deduction. This is one of those tricky areas where the wash sale rule extends beyond just your own accounts. To be safe, coordinate with your spouse on any trades around the same securities during your tax loss harvesting window. It's definitely one of the more complex aspects of the wash sale rule that catches people off guard!

Great questions! For capital losses, there's no minimum holding period requirement like there is for the preferential tax rates on capital gains. However, the timing does matter for how the losses are classified and used: - Short-term capital losses (from positions held ≤1 year) are used first to offset short-term capital gains, then long-term gains - Long-term capital losses (from positions held >1 year) are used first to offset long-term capital gains, then short-term gains Since short-term gains are taxed as ordinary income (higher rates), it can actually be more valuable to have short-term losses to offset them. Regarding the wash sale rule with spousal accounts: Yes, it does apply! The IRS considers transactions by your spouse, and even in IRAs/401(k)s, when determining wash sales. So if you sell a stock at a loss in your taxable account and your spouse buys the same stock in their IRA within the 30-day window, it would trigger the wash sale rule and disallow your loss deduction. This is one of the trickier aspects of wash sale rules that many people don't realize. The safest approach is to coordinate with your spouse and make sure neither of you is buying anything substantially identical to what you're selling for tax loss harvesting during that 61-day total window (30 days before + day of sale + 30 days after).

Great questions! For capital losses, there's no minimum holding period requirement - you can harvest losses immediately after purchase if needed. However, the timing does affect how the losses can be used: short-term losses (held less than a year) must first offset short-term gains, and long-term losses (held more than a year) must first offset long-term gains. Any remaining losses can then offset the opposite type, and finally up to $3,000 can be deducted against ordinary income. Regarding the wash sale rule with your spouse's IRA - yes, this can be problematic! The wash sale rule applies to purchases by your spouse in any account (including IRAs) since you file jointly. If your spouse buys the same security in their IRA within 30 days of your loss sale, it would trigger the wash sale rule and disallow your loss deduction. This is one of those tricky areas where the IRS considers your spouse's transactions as related to yours for wash sale purposes. To be safe, coordinate with your spouse on any trades around your tax loss harvesting dates, regardless of account type. The 30-day window applies both before and after your sale date, so communication is key!

Great questions! For the holding period, there's no minimum time requirement to claim a loss - you can sell at a loss the day after you buy if you want. However, the timing does affect whether it's classified as a short-term or long-term loss, just like gains. Short-term losses (held less than a year) first offset short-term gains, and long-term losses first offset long-term gains. This can impact your overall tax strategy since long-term gains are taxed at lower rates than short-term gains. Regarding the wash sale rule and spousal accounts - this is a tricky area! The IRS considers transactions in your spouse's accounts when you file jointly, so if you sell at a loss and your spouse buys the same security within the 30-day window (even in an IRA), it could potentially trigger the wash sale rule. However, there's some debate about whether purchases in retirement accounts like IRAs actually trigger wash sales since they're not taxable accounts. I'd definitely recommend checking with a tax professional on this specific scenario to be safe. Better to err on the side of caution and coordinate your trades if you're both active investors!

Great questions! For capital losses, there's no minimum holding period requirement - you can harvest losses on stocks you've held for any amount of time. However, the short-term vs long-term distinction does matter for how losses are applied. Short-term losses (held less than a year) first offset short-term gains, and long-term losses (held over a year) first offset long-term gains. Any remaining losses can then offset the other type, and finally up to $3,000 can be deducted against ordinary income. Regarding the wash sale rule and spousal IRAs - yes, this can be a problem! The IRS considers purchases by your spouse (and even in their IRA) as potentially triggering wash sale rules since you file jointly. It's one of the more obscure aspects of the rule that catches people off guard. To be safe, coordinate with your spouse to avoid any purchases of the same securities within the 30-day window around your loss harvesting trades. This is definitely one of those areas where the rules can get complex, so if you're dealing with significant amounts, it might be worth a quick consultation with a tax professional to make sure you're handling everything correctly!