Tax-Loss Harvesting Estimator
Selling a loser to bank a capital loss saves tax now - but it also lowers your cost basis, so most of that saving is deferred, not erased. This estimates the real, honest value: the up-front saving you can reinvest, minus the tax you'll eventually owe, plus the rate arbitrage on the $3,000 ordinary-income offset.
Tax saved this year
$0
Loss carried forward
$0
Net benefit (today's $)
$0
Value kept per $ loss
0%
$
$
%
%
%
yrs
%
The economics, in today's dollars
Net benefit vs how long you defer
The longer until you sell, the more the deferred tax shrinks in present value - the dot marks your horizon.
Tax-loss harvesting is mostly tax deferral, not free money. Selling at a loss and rebuying a similar (not substantially identical - beware the 30-day wash-sale rule) asset lowers your basis, so you'll owe tax on a larger gain later. The real value is (1) the time value of investing the up-front saving, and (2) rate arbitrage - offsetting ordinary income at a high rate now versus paying the lower cap-gains rate later. This is an estimate; it ignores AMT, net investment income tax, the long-term/short-term distinction within gains, and assumes the replacement recovers. Not tax advice.