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If you find that your proposed sales are raising your tax liability to unacceptable levels, but you need to sell in order to raise cash (for example, for a down payment on a house), you may be able to offset some of your capital gains with capital losses.

There are two methods you can use when you want to offset some of your capital gains.

  • Carry forward losses from a previous year
  • Sell some assets at a loss this year

Notes

  • Estimating can lead to costly miscalculations in the timing of the stock sales. Carefully estimate your taxable income for the year.
  • Tax savings resulting from offsetting your capital gains serves to replace only a portion of the money you lose when you sell a security for less than the purchase price.
  • There may be good reasons to hold onto that stock that has lost some value.
  • There are many variables when trying to plan ahead for taxes and security sales. Tax laws are subject to change, and the security you're thinking of selling could change significantly in value. You may wish to consult a tax professional.