tax-loss harvesting

Tax loss harvesting refers to a tax reduction strategy whereby you sell some investments at a loss to offset gains you’ve realized by selling other stocks at a profit. This results in you paying lower taxes. This strategy is used by investors to limit the amount of taxes due on short-term capital gains, which are generally taxed at a higher rate than long-term capital gains. However, if done properly, it can also be used to offset long-term capital gains.