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I recently sold a business and will receive a pay-out spread over a couple of years. Each year I will receive a predefined sum, which will be reported as capital gains.

Now, with the stock market down, should I sell* stocks to generate capital losses to lower my overall tax bill? In other words, can I offset my capital gains from a business sale with losses from stocks?

(*) The strategy would be to sell individual stocks and immediately replace with others, to stay in the market. I have no intention on timing the market.

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  • What is your jurisdiction? Tax questions are impossible to answer without it.
    – Grade 'Eh' Bacon
    Mar 13, 2020 at 18:21
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    United States of America
    – brt
    Mar 13, 2020 at 18:23

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Yes, you can offset capital gains with capital losses. See 1040 Schedule D, you'll see that you list all your investments, gains or losses, and total them up. But while this might be a good tax strategy, it might be a poor investment strategy (selling at a loss). You might be spending a dollar to save a quarter.

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

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    The idea would be to do tax loss harvesting. So, sell and immediately buy a similar asset.
    – brt
    Mar 15, 2020 at 20:53

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