In year 2020 I have:
- short-term capital losses = 2000 USD - long-term capital losses = 3000 USD - short-term capital gains = 2500 USD - long-term capital gains = 5000 USD
Can I harvest the 2k USD of short-term losses to be deducted against 2kUSD out of 2.5kUSD of my short-term capital gains? Or must I first tax-harvest the 3k USD of long-term capital losses be deducted against 3kUSD out of 5kUSD of my long-term capital gains (which would mean I can't harvest any short-term loss, since 3kUSD is the maximum one can tax-harvest in 2020)? I am in the United States.
Regarding tax-loss harvesting in the United States, https://www.moneyunder30.com/profit-from-tax-loss-harvesting (mirror) mentions some priorities between short-term capital gains and long-term capital gains when tax-loss harvesting short-term capital losses or tax-loss harvesting long-term capital losses, but doesn't indicate what the priority for between harvesting long-term losses and harvesting short-term losses is:
Long-term losses are first applied against long-term gains, and then against short-term gains. Meanwhile, short-term losses are applied first to short-term gains. This sequence takes place because long-term capital gains are taxed at a lower tax rate than short-term capital gains.