Tax-Loss Harvesting Calculator

Estimate the tax savings from harvesting a capital loss, including the $3,000 annual ordinary-income offset and any loss carried forward.

Inputs

What you originally paid for the investment.

What you sell it for now.

Other realized capital gains this year the loss can cancel first.

Your marginal tax bracket, used for the income offset.

Result

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How to use this calculator

  • Enter the cost basis (what you paid) and the current sale price.
  • Enter any capital gains realized this year that the loss can offset first.
  • Enter your marginal ordinary-income tax rate.
  • Read the estimated tax savings and any loss carried forward.

About this calculator

Tax-loss harvesting means deliberately selling an investment at a loss to reduce your tax bill. The realized loss first cancels out any capital gains you have realized the same year, dollar for dollar. If losses remain after wiping out your gains, up to $3,000 per year can be deducted against ordinary income (wages, interest), and anything left over is carried forward indefinitely to offset gains or income in future years. This calculator computes the loss from your cost basis and sale price, applies the gains offset and the $3,000 ordinary-income cap, and estimates the tax savings using your marginal rate, along with the amount carried forward. The most important caveat is the wash-sale rule: if you buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed.

How it works — the formula

Loss = max(0, Cost basis − Sale price) Offset gains first, then ≤ $3,000 vs ordinary income Savings ≈ (offset gains + ordinary offset) × marginal rate Carryforward = remaining loss

Losses net against gains, then a capped amount against ordinary income; the rest is banked for future years.

Source: IRS — Topic No. 409, Capital Gains and Losses

Worked examples

Example 1
Basis $10k, sale $7k, 24% bracket
Inputs:
basis=10000, sale=7000, gains=0, rate=24
Output:
$3,000 loss → $720 saved
Example 2
Basis $20k, sale $10k, no gains, 24%
Inputs:
basis=20000, sale=10000, gains=0, rate=24
Output:
$3,000 offset ($720), $7,000 carried forward
Example 3
Basis $15k, sale $10k, $5k gains, 32%
Inputs:
basis=15000, sale=10000, gains=5000, rate=32
Output:
$5k offsets gains → ~$1,600 saved

Limitations

  • Uses marginal rate as a proxy; long- vs short-term gain rates differ.
  • Does not enforce the wash-sale rule — you must avoid repurchases.
  • Ignores state taxes and net investment income tax.

Estimate, not tax advice; consult a professional and mind the wash-sale rule.

Frequently asked

What is tax-loss harvesting?+
It is selling an investment that has dropped below your purchase price to realize a capital loss, which lowers your taxes by offsetting capital gains and, beyond that, up to $3,000 of ordinary income per year. Remaining losses carry forward to future years.
How much loss can offset ordinary income?+
Up to $3,000 of net capital loss per year ($1,500 if married filing separately) can be deducted against ordinary income after offsetting all capital gains. Losses above that are carried forward to subsequent tax years.
What is the wash-sale rule?+
If you buy the same or a substantially identical security within 30 days before or after selling at a loss, the IRS disallows the loss for that year (it adjusts into the new lot's basis). To harvest a loss cleanly, avoid repurchasing within that 61-day window.
Do losses offset gains at the same rate?+
Losses first net against gains of the same type (long-term against long-term, short-term against short-term), then across types. This tool uses your marginal rate as a simplification; actual savings depend on whether the offset gains were short- or long-term.
What happens to losses I cannot use this year?+
They carry forward indefinitely. Each future year they again offset capital gains first, then up to $3,000 of ordinary income, until exhausted. There is no expiration on capital-loss carryforwards for individuals.
Is harvesting always worth it?+
Not always. It defers rather than eliminates tax if you rebuy a similar asset (you lower your basis, increasing future gains), and transaction costs and the wash-sale rule matter. It is most valuable for offsetting large gains or banking losses in low-income years.

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