Ah, December. That time of year when thoughts turn to … taxes? That’s right, the 2019 tax season will soon be upon us and that means now is the time to take a critical look at your stock portfolio. An effective tax strategy for investors at the end of every year is taking stock of your year and, when necessary, pruning your portfolio. It’s always nice to look at the stocks that have made gains. However, sometimes there are one or two high-flying stocks that you know may have run their course. Do you have the courage to take some profits even if the stock may have room to grow?
On the other side, it’s never pleasant to look back at the stocks that have underperformed, or even posted losses. However, now is the time to take advantage of tax laws and put your investment losses to work for you. By selling off stocks that have posted losses for the year, you not only put more cash on the sidelines to pick up better stocks in the new year, but you also trigger a capital loss, which can be a counterbalance to any capital gains you had as well as up to $3,000 in ordinary income. This tax strategy, known as “harvesting” is particularly useful for high-income taxpayers.
One caveat to this strategy is that investors should not be selling stocks they plan on purchasing again within 30 days. The same tax laws that allow “harvesting” your capital losses also say you can’t take a capital loss if you repurchase the same shares within 30 days of the sale. This means you’re looking for the stocks that are not coming back anytime soon.
In this slideshow, we’ll review eight stocks of companies that you should consider selling in the next two weeks. In some cases, these companies may be stocks you can look at later in 2019, in other cases, these are stocks that you may need to say goodbye to forever.
Click the "Continue to Slide #1" button to view the first company.
