Tax Strategy Epiphany

It just hit me that this trick should work to harvest capital losses for this year. It avoids the wash sale problem, though it has one disadvantage I can think of.

The trick is to sell a stock and replace it with a similar one, but a different company. For instance, sell NTNX and buy AYX. Both are excellent companies with great prospects and growth.

The main disadvantage is if you sell the new holding soon enough to take a short term capital gain. You would likely realize a larger gain than by selling the original stock you were holding, and because you bought the replacement more recently, you are more likely to face a short term gain.

The risk of harvesting a loss and buying the same stock 31 days later is that the share price recovers during that time. My idea avoids this risk.

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