The S&P 500 may be down by 21% this year, but tax laws could give some underperforming stocks a bounce later in 2022, according to a report from Bank of America.
Tax-loss harvesting has become a more common strategy since the passing of the Tax Reform Act of 1986, BofA said in the report, “This Year’s Big Autumn Harvest: Tax Losses.” Investors who use this approach typically sell their money-losing investments to reduce the taxable capital gains they made by selling other stocks. For most mutual funds, the deadline to sell is Oct. 31, while retail investors have until Dec. 31. Tax loss candidates, or TLC, are defined as S&P 500 stocks that are down 10% or more from Jan. 1 to Oct. 31, the report said.
Source: finance.yahoo.com
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