How to reduce capital gain from stocks?

[stech]

I have about $35-$40K capital gains from stocks in 2022. this may not be enough to talk to local tax pro, but wanted to how how can I reduce taxes? I saw few videos on Instagram (https://www.instagram.com/reel/Cwvkb_jOUqy/?utm_source=ig_web_copy_link) 

that I could create an trust > holding company > income from business. 

Is there a tool online where I can enter my ordinary income, capital gain for Harvest Losses to Offset Gains strategy?

[VolvoGirl · Accepted solution]

That's a lot.  Well it's too late to reduce your 2022 taxes.  But you should see a financial planner for the future.  

[Opus 17]

2022?  That's over.  You owe the tax.

2023?  If you want to offset the gains, you need capital losses.  Understand that buying something new with the intention of selling at a loss is just plan stupid, if you lose $10,000 you save $1500 in taxes.  Just pay the taxes.  You can't create a loss from thin air.

If you already own investments that have lost money, you might want to sell them to realize the loss.  Unless you think they will come back in value and you want to invest for the long term.  

[stech]

I am in similar situation for 2023. What can I do now? 

[Opus 17]

---

@stech wrote:

I am in similar situation for 2023. What can I do now? 

---

Again, within the realm of capital transactions, if you have investments that have lost value and you are willing to sell them, selling at a loss will offset the capital gains from the things you sell at a profit.  Be mindful that if you sell an investment to create a loss, but you want to buy it back at the lower price so you can hold it and see if it appreciates again, you must wait at least 31 days from selling an investment before you re-buy the same or a similar investment.  If you don't wait 31 days, you trigger the wash sale rule and you can't use the loss to offset your gain.

Otherwise, if you want to reduce your tax, you can take advantage of any of the usual tax breaks.  Electric car credit, energy saving credit.  Deductions for medical expenses and charitable donations.  And so on.

If you specifically want investment tricks to "hide" your gains, you would need to see a professional financial advisor, but I think most of the tricks are smoke and mirrors.