Tax saved by selling losers: gains offset, the $3,000 income deduction, the carryforward
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 29 Sept 2026.Tax-loss harvesting $22,000 of losses against $4,000 of short-term and $10,000 of long-term gains saves $3,180 of federal tax at 24% and 15% rates: the gains are wiped out, $3,000 comes off ordinary income and $5,000 carries forward. The calculator nets them the way Schedule D does, with the $1,500 limit for married filing separately.
$3,180
From harvesting $22,000 of losses, at a 24% ordinary and 15% long-term rate.Federal only, at the marginal rates you enter. An estimate, not tax advice.
| Harvested losses used against | Amount |
|---|---|
| Short-term gains (taxed at 24%) | $4,000 |
| Long-term gains (taxed at 15%) | $10,000 |
| Ordinary income (up to $3,000) | $3,000 |
| Carried forward | $5,000 |
| Total harvested | $22,000 |
Rates and rules read from IRS Topic no. 409, Capital gains and losses on 29 Sept 2026; they may have changed since.
Choose your "Filing status", which sets the yearly limit on losses against ordinary income.
Enter the short-term and long-term gains taken so far, and any carryover from last year.
Enter the "Short-term losses to harvest" and "Long-term losses to harvest", with your ordinary and long-term gains rates.
Read "Federal tax saved this year" and "Carried forward to next year", and open "Schedule D netting" for each step.
Press "Share result" to copy a link with these inputs.
Tax-loss harvesting means selling investments that are worth less than you paid, so the loss cancels gains you have already taken or will take. The saving depends on which gains the loss cancels, because short-term gains are taxed as ordinary income and long-term gains at 0%, 15% or 20%.
How the netting works. The IRS nets short-term losses against short-term gains and long-term losses against long-term gains first. Only then are the two net figures combined. A long-term loss that ends up cancelling a short-term gain saves tax at your ordinary rate, which is why the order matters. This calculator shows where each dollar of harvested loss went: short-term gains, long-term gains, ordinary income or the carryforward.
The $3,000 limit. When losses exceed gains, IRS Topic 409 lets you deduct the smaller of the net loss and $3,000 ($1,500 if married filing separately) from other income. The rest carries forward to later years with no time limit, and keeps its short-term or long-term character. The deduction is taken from the short-term loss first, following the Capital Loss Carryover Worksheet.
The rates are yours. Your ordinary rate and your long-term gains rate depend on your whole return, so you enter them. If the 3.8% net investment income tax applies to you, add it to both. The saving is figured at those marginal rates, so a large loss that moves you into a lower bracket is slightly overstated.
Watch the wash sale rule. Buying the same or a substantially identical security within 30 days before or after the sale disallows the loss. The Wash Sale Calculator checks the dates.
What this does not model: state tax, collectibles and section 1250 gains, the worksheet adjustment for negative taxable income, and the lower basis you carry into any replacement investment, which means part of today's saving is a deferral rather than a gift. An estimate, not tax advice.
Each dollar of loss saves your tax rate on the gain it cancels. Against a short-term gain in the 24% bracket, $1,000 of loss saves $240; against a long-term gain at 15%, $150. Past your gains, up to $3,000 of net loss comes off ordinary income, and anything beyond carries forward to later years.
Yes, up to $3,000 a year, or $1,500 if married filing separately, once losses exceed all your capital gains. IRS Topic 409 sets the limit as the smaller of that amount and the net loss on Schedule D line 16. Any loss above the limit carries forward to the next year with no expiry date.
Only after they have offset short-term gains. The IRS nets short-term against short-term and long-term against long-term first, then combines the two results. A net short-term loss then reduces a net long-term gain, and a net long-term loss reduces a net short-term gain, which saves tax at the higher ordinary rate.
Net losses above the $3,000 deduction move to next year and keep their character, short-term or long-term. Next year they are treated as if realised then, offsetting gains first and then up to $3,000 of income again. The Capital Loss Carryover Worksheet in the Schedule D instructions figures the amounts, taking this year's deduction from short-term losses first.
Often, yes. Even with no gains, a realised loss takes up to $3,000 off ordinary income, worth $660 in the 22% bracket, and the rest carries forward to cancel future gains. The trade-off is a lower cost basis if you buy a similar investment back, so part of the saving returns as tax when you sell later.
Buying the same or a substantially identical security within 30 days before or after the sale is the common one: the wash sale rule disallows the loss. Buying it in an IRA loses the loss permanently. Harvesting losses that only cancel gains taxed at 0% saves nothing now, though the carryforward may help later.
Rates and rules change; check the source before you rely on a figure.
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