Capital Loss Harvesting Calculator

How a Capital Loss Harvesting Calculator Helps You Plan

A Capital Loss Harvesting Calculator is built for a specific planning problem: you want to understand how selling investments at a loss could change your net taxable capital gains and your estimated tax bill. The math of harvesting is simple on the surface—sell a position below its cost basis to realize a loss—but the decision is rarely simple in practice. Investors usually care about several layers at once: how much loss they can harvest, which gains that loss could offset, how short-term and long-term categories interact, whether unused losses can carry forward, and whether an anti-avoidance rule could disallow the loss if exposure is repurchased too quickly.

This Capital Loss Harvesting Calculator brings those layers into one place. It starts with the basics: proceeds, cost basis, and realized profit or loss for a single position. Then it scales to portfolio planning with a batch list of positions, allowing you to total potential realized losses and gains across holdings. Finally, it translates those totals into a tax-impact estimate using the rates and limits you choose. Because tax rules vary widely across countries and sometimes differ by asset class, the calculator is designed to be flexible: you can model short-term and long-term rates separately and include an optional limit for how much net loss may offset other income where that applies.

What Capital Loss Harvesting Is and What It Is Not

Capital loss harvesting is not a promise of “free money” and it is not a guarantee of better investment performance. It is a tax-planning technique that can reduce taxes in certain situations by changing the timing of recognized gains and losses. You may still prefer to hold a position for long-term growth, or you may not want to trigger a loss if you expect the asset to rebound quickly. The key idea is that taxes are part of your net return, and recognizing a loss can sometimes improve after-tax outcomes without changing your long-term market exposure—if you are able to maintain exposure through permitted substitutes or through timing that does not trigger a disallowance rule.

The most responsible way to use a capital loss harvesting calculator is as a scenario tool. You test inputs and compare outcomes: harvesting now versus later, selling one position versus another, or harvesting a small loss versus a large one. You can also stress-test your plan by changing assumptions, such as the tax rate or the size of your realized gains for the year. The goal is not to perfectly predict your final tax bill; the goal is to make the tradeoffs clear before you place trades.

Realized Losses, Cost Basis, and Proceeds

Every harvesting estimate begins with three numbers: the cost basis of the shares you would sell, the proceeds you would receive if you sold them, and any fees that reduce proceeds. The realized profit or loss is simply proceeds minus cost basis. If the result is negative, that negative amount is the realized capital loss you could potentially harvest, subject to the rules that apply to you.

Cost basis can be more complex than it looks. Many investors own multiple lots of the same asset purchased at different prices. Your actual realized gain or loss depends on which shares are sold. Some brokerages support specific-lot selection; others default to a method such as FIFO. This calculator is lot-agnostic by design: it asks you to enter the basis per share for the shares you plan to sell. If you have multiple lots, you can treat each lot as its own row in the portfolio batch mode.

Short-Term vs Long-Term Categories

Many tax systems treat gains and losses differently depending on how long you held the investment. The most common distinction is short-term versus long-term, where short-term gains are often taxed at a higher rate. This is why harvesting can be especially valuable when you have short-term gains: a loss that offsets short-term gains may reduce tax at a higher rate than a loss that offsets long-term gains. That said, netting rules can vary. Some systems net within categories first, then allow netting across categories. Others have different ordering rules. This calculator follows a widely used netting logic and keeps everything transparent by showing your net capital position and your estimated tax reduction based on the rates you enter.

Even if your jurisdiction does not use the exact same categories, the short-term and long-term fields can still be useful as “higher-rate” and “lower-rate” buckets. You can model two different rates and see how changing the mix of harvested losses across buckets affects outcomes.

Offsetting Gains and Understanding Net Capital Position

The core purpose of loss harvesting is to reduce taxable gains. If you already realized gains earlier in the year, harvesting a loss can reduce those gains. Your net capital position after harvesting is the combined result of your gains and your harvested profit or loss. If the total is still a net gain, you may owe capital gains tax, but potentially less than before harvesting. If the total becomes a net loss, you may owe no capital gains tax for the year, and you may have unused loss that could carry forward or offset other income depending on local rules.

This is why the Tax Impact tab is structured around “before” and “after.” Before harvesting, your estimated tax is based on the realized gains you enter. After harvesting, the calculator nets your harvested profit or loss against those gains and re-estimates the tax. The difference between those two amounts is your estimated tax reduction from harvesting under your assumptions.

Carryforward: When Losses Exceed Gains

Investors often discover that losses can exceed gains, especially in volatile markets. In that case, you may have a net capital loss. Some jurisdictions allow a portion of that net loss to reduce other income up to a limit; the remainder may carry forward. Other jurisdictions may restrict loss usage, limit carryforward, or treat different asset types differently. Because of these differences, the calculator treats carryforward as a planning output rather than a guaranteed tax result.

To help you model your own rules, the calculator includes an optional “Other Income Offset Limit” and a separate “Other Income Tax Rate.” If your jurisdiction does not allow this offset, set the limit to zero. If it does allow an offset, enter the limit you believe applies to you, and the calculator will estimate the additional tax reduction from applying net loss against other income. Any remaining unused loss is shown as an estimated carryforward.

Anti-Avoidance Rules and “Wash Sale” Risk

Many investors want to harvest a loss without changing their long-term exposure to the market. That desire is exactly why many jurisdictions have anti-avoidance rules designed to prevent taxpayers from selling an asset at a loss and immediately buying it back just to claim the loss. Depending on where you live and what you trade, the loss may be disallowed, deferred, or adjusted if you buy the same or a substantially identical asset within a defined window around the sale date.

This calculator does not attempt to decide whether a transaction qualifies as substantially identical or whether a specific replacement strategy is permitted. Instead, it helps you quantify the size of the loss you are attempting to harvest so you can weigh it against any compliance constraints and portfolio objectives. If you are unsure about the rules that apply to you, consider speaking with a qualified tax professional before executing a harvesting plan.

Why Fees, Spreads, and Execution Matter

Harvesting is not free. Even with zero-commission brokers, you can pay costs through spreads, slippage, and market impact. In addition, some products have higher transaction costs or wider spreads than others. If you harvest a small loss but pay meaningful execution costs, your net benefit may be limited. This is why the Single Position and Portfolio Batch modes allow you to include estimated fees so the realized profit or loss better reflects what you actually keep.

How to Use the Single Position Mode

Single Position mode is designed for quick decisions. You enter shares, basis per share, current price per share, category, and optional fees. The calculator outputs proceeds, cost basis, realized profit or loss, and the harvested loss if the result is negative. This is helpful when you are evaluating a single candidate position or when you want to sanity-check a loss before adding it into a broader plan.

If you have multiple tax lots, treat each lot as its own single-position scenario or use the Portfolio Batch mode to input multiple rows. In either case, focus on accurate basis information; basis errors can completely reverse the result.

How to Use the Portfolio Batch Mode for a Harvesting Plan

Portfolio Batch mode is where harvesting becomes strategic. You can list multiple positions (or lots), specify shares, basis, and current price, and tag each row as short-term or long-term. The calculator totals potential realized profit or loss by category and displays a combined net result. This lets you create a “harvest list” and see whether you are mostly harvesting short-term losses, long-term losses, or a mixture.

A practical approach is to start by identifying positions with meaningful unrealized losses and high conviction substitutes, then add them as rows. Next, calculate totals and compare them with your realized gains for the year in the Tax Impact tab. If the harvested losses exceed your gains by a large margin, you can decide whether to harvest less, harvest only enough to offset gains, or harvest more if carryforward rules in your situation make that attractive.

Estimating Tax Impact with Custom Rates

A tax estimate is only as good as its assumptions. That is why this Capital Loss Harvesting Calculator asks you to enter your own short-term and long-term tax rates rather than hard-coding a single set of rules. You can model different brackets, different local regimes, or different filing outcomes by changing rates and re-running the calculation. If your tax system does not distinguish short-term and long-term gains, you can enter the same rate in both fields and still get a useful estimate of how harvesting changes your net capital position.

The calculator outputs both “Tax Before Harvesting” and “Tax After Harvesting,” then calculates “Estimated Tax Reduction.” If you enter an other-income offset limit, the calculator also estimates the value of applying net losses to other income up to that limit, and it shows any remaining unused loss as an estimated carryforward.

Scenario Planning: Making Better Decisions with the Calculator

The best use of this calculator is not a single run—it is comparison. Try at least three scenarios:

• Harvest nothing and record your baseline tax estimate
• Harvest only enough losses to offset realized gains
• Harvest a larger set of losses and see the carryforward estimate

Next, adjust the assumed tax rates and observe how sensitive your results are. If a small change in rate dramatically changes the estimated benefit, you know the plan is rate-sensitive and you should confirm your marginal rates before acting. If the plan is robust across a reasonable range of assumptions, you can focus more on execution and compliance considerations.

Practical Limits and Important Assumptions

Like all calculators, this tool simplifies reality. It does not import brokerage transactions, it does not determine your legal tax treatment, and it does not model every possible netting order used worldwide. It also does not account for factors such as dividends, distributions, or adjustments that may affect basis. Instead, it provides a structured estimate that makes your inputs explicit and easy to review.

Use this calculator to improve clarity and discipline, not to replace professional advice. If your plan involves large trades, complex holdings, multiple accounts, or uncertain tax rules, confirm details with a qualified professional.