A portfolio can be up nicely and still hold a few positions in the red. Those losers are worth something at tax time: sell one and you turn a paper loss into a realized capital loss, which lowers your tax bill. The trick is staying invested without breaking the wash-sale rule. That is tax-loss harvesting, and the Finapolis Portfolio runs the whole scan for you. Here it is on a real portfolio, as of June 8, 2026.
Selling a position that is down turns a paper loss into a tax deduction, and a similar replacement keeps you invested while you do it.
What tax-loss harvesting is
The idea is 3 steps.
| Step | What happens |
|---|---|
| Sell a position trading below cost | You realize a capital loss |
| Apply the loss | It offsets your capital gains first, then up to $3,000 of ordinary income a year; anything left carries forward |
| Buy a similar replacement | You keep your market exposure and stay clear of the wash-sale rule |
The wash-sale rule is the one to respect: if you buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed. A replacement that is similar but not identical is how you stay invested and still keep the deduction.
A scan on a real portfolio
This portfolio is up about $3,000, roughly 23% on what it cost, as of June 8, 2026. Most of the 12 holdings are green. A few are not: NVO, PDD, and YMM are each down double digits, with STZ down a little as well.
The portfolio in Finapolis Portfolio: 12 holdings, up $3,001 (about 23%) on cost, with a handful of positions in the red. As of June 8, 2026.
The Tax Harvesting tab scans the portfolio lot by lot and lists what can be harvested. Because it works at the lot level, it can surface a loss even inside a position that is up overall: CHCI is green as a whole, yet 20 of its shares sit in lots that are underwater. For each loser the tool suggests a replacement, shown with its Finapolis grade and a match score for how closely it tracks the name you sold. The closest fit here is BF.B against STZ, both spirits makers, at 69%.
The Tax Harvesting scan: 5 loss positions with their short-term and long-term losses, and a suggested replacement for each, carrying its Finapolis grade and a match score. As of June 8, 2026.
Add the 5 together and there is $913.02 of harvestable loss. This investor has no realized gains yet this year, so there is nothing to offset. Instead the loss comes off ordinary income, up to the $3,000 annual limit, at the 24% short-term rate the tool is set to. That is the $219.12 of tax savings. Because $913 sits under the $3,000 cap, all of it counts this year and nothing carries forward.
The harvest math: $913.02 of losses, no realized gains to offset, $219.12 of tax savings at the 24% rate, and nothing carried forward. As of June 8, 2026.
The wash-sale rule
The wash-sale rule is why you cannot simply sell a loser and buy it straight back. If you repurchase the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed, and the rule applies across your accounts, including an IRA. That is the point of a replacement: a different name with similar exposure lets you keep your position size and the deduction at the same time. The tool's Restricted List tracks anything you have sold and cannot buy back yet. It is empty here because nothing has been harvested.
Common questions about tax-loss harvesting
Do I have to give up the stock to harvest the loss?
No. You can buy a replacement with similar exposure, or simply wait 31 days and buy the same name back. What you cannot do is repurchase the same or a substantially identical security inside the 30-day window.
What if I have no capital gains this year?
The loss still helps. Up to $3,000 of net capital loss comes off your ordinary income each year, and anything beyond that carries forward to future years. In this scan the full $913 lands this year because it is under the $3,000 limit.
Can I harvest a loss in a position that is up overall?
Yes. Harvesting works at the tax-lot level, so a position that is green in total can still hold individual lots that are underwater. CHCI is the example here.
How big is the saving?
It is the loss times the rate that applies. With no gains to offset, $913.02 against a 24% ordinary rate is $219.12. If you were offsetting long-term gains instead, the long-term rate would apply, 15% here.
When do investors harvest?
Often toward year-end, once the year's gains and losses are clearer, but the deduction is available whenever you realize the loss.
