Thanks for quick response and sorry for the confusion in the original post
I have realized gains of $103,000 (Long term) and $60,000 (short term) this year but want to reduce my tax bill. I have unrealized short term losses of about $75,000 which I was planning to sell by the end of 2024. With this strategy, I will have $103,000 LT gains and $15,000 ST losses at end of 2024, so I am assuming I will pay long term capital gains tax for the $88,000 in Apr 2025. Is this correct?
Now 2 scenarios which I am preparing for 2025 - If I make say $75,000 Short term gains in 2025 and no long term gains, I will have to pay short term gains on 75,000 in 2026. Is it worth offsetting long term gains with short term losses?
Scenario 1:
For 2024: $103,000 LT gains and $15,000 ST losses = $88,000 LT gains, tax at 15% = $13,200
For 2025, $75,000 ST gains, tax at 35% = $26250
Total tax: $39,450
Scenario 2: If I keep ST losses as 0 and move the $15,000 ST losses to 2025
For 2024: $103,000 LT gains, tax at 15% = $15450
For 2025, $60,000 ST gains, tax at 35% = $21000
Total tax: $36450
So, offsetting long term gains with short term losses is not tax beneficial, is this correct understanding?
Thanks for your patience on this.
