What would this loss save me in taxes?

How the math works

Your losses and gains for the year get netted the way the IRS does it on Schedule D: short-term losses against short-term gains, long-term against long-term, and then the two totals against each other. There's no cap on how much gain a loss can cancel.

If you end up with a net loss, up to $3,000 of it comes off your other income, like your paycheck ($1,500 if you're married filing separately, which this doesn't cover). Whatever's left carries forward to 2027, and the year after that, for as long as it takes, and it keeps its short-term or long-term label.

The saving at the top is your 2026 federal tax without this loss minus your tax with it, using the 2026 brackets, the 0%, 15% and 20% long-term rates and the 3.8% net investment income tax. For stocks and ETFs, the trade date decides the year, so a sale on Thursday, December 31, 2026 counts for 2026 even though it settles in January.

The honest catch

If you sell and buy back something similar, your new cost basis is lower by about the same amount as the loss. So when you sell that later, you'll have a bigger gain. A lot of the time, harvesting doesn't erase tax, it pushes it into the future.

Pushing it out can still be a real saving. It is when the loss knocks out income taxed at a higher rate than the gain will be later (say 22% now against a 15% long-term rate later), when you sell later in a year where the gain lands in the 0% bracket, when you give the shares to a charity instead of selling them, or when you never sell at all, because your heirs get a cost basis equal to what the shares are worth when you die. If none of those apply, think of the saving as a loan from the IRS with no interest.

And if you buy back the same stock, or something substantially identical, within 30 days before or after the sale, the wash-sale rule disallows the loss. The wash-sale checker shows how much and where it goes.

What this leaves out

State income tax, itemized deductions, credits, the alternative minimum tax and married filing separately. It also leaves out dividends and interest, which can change your bracket and the 3.8% tax, and collectibles gains, which have their own rates. The value of the carryforward is rough on purpose: what it's really worth depends on gains you haven't taken yet.

Watch

• Tax-Loss Harvesting: What a $6,000 Loss Can Actually Save You
• Should I Sell My Stocks Now? Ask These 6 Questions First.