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.
Result
- Realized capital loss$3,000.00
- Loss offsetting capital gains$0.00
- Loss offsetting ordinary income (max $3,000)$3,000.00
- Tax savings this year$720.00
- Loss carried forward$0.00
Step-by-step
- Loss = cost basis − sale price = $10,000.00 − $7,000.00 = $3,000.00.
- Offset capital gains first ($0.00), then up to $3,000 of ordinary income ($3,000.00).
- Tax saved ≈ ($3,000.00) × 24% = $720.00; $0.00 carries to future years.
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 lossLosses net against gains, then a capped amount against ordinary income; the rest is banked for future years.
Worked examples
- Inputs:
- basis=10000, sale=7000, gains=0, rate=24
- Output:
- $3,000 loss → $720 saved
- Inputs:
- basis=20000, sale=10000, gains=0, rate=24
- Output:
- $3,000 offset ($720), $7,000 carried forward
- 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.