The tax rate on long-term capital gains would rise from 15 percent now to 20 percent in 2011, according to President Obama’s budget. That’s another reason to harvest any losses you now have on stocks, bonds, and mutual funds held in taxable accounts.
Capital losses can offset capital gains. If you don’t have many capital gains this year, you can deduct $3,000 worth of losses from your ordinary income.
What’s more, losses you can’t use right away can be carried forward to 2010 and future years, indefinitely. Therefore, if you pile up a large bank of losses now you can hold onto them. If you still have unused losses in 2011 and beyond, you can use them to make your long-term capital gains tax-free while others are paying 20 percent in tax.
