A Case Study of Gurtin’s Municipal Tax Loss Harvesting Process
From: Gurtin
Goal: To Decrease or Permanently Eliminate Tax Liabilities
Tax loss harvesting with municipal bonds can help decrease or permanently eliminate tax liabilities investors have realized from capital gains in other portions of their overall investment portfolio. Using a systematic tax loss harvesting process, investors are able to sell securities that have depreciated in value and thereby realize losses that can be used to net out realized gains.
Unlike tax loss harvesting in other asset classes — such as equities — where the realization of losses is accelerated and the realization of gains is postponed, tax loss harvesting in municipal bond portfolios can create a permanent capital loss, assuming that replacement bonds purchased are held to maturity.
