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Tax Loss Harvesting Tax Impact Estimator

This estimator breaks a harvested investment loss into the portion used against capital gains and an optional portion you assume is applied against ordinary income, then estimates the tax reduction using separate rates for those two uses. It is built to make the assumed tax treatment explicit rather than applying one tax rate to the entire loss.

Federal tax rules place conditions on how capital losses are used, carried forward, and disallowed under wash-sale rules. Because those details depend on the return and taxpayer, this page does not enforce a statutory annual limit; you enter the ordinary-income offset amount you actually want to model.

Calculator inputs

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Result
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Estimated current tax reduction
Tax reduction from gain offset—
Tax reduction from ordinary offset—
Loss not modeled as currently used—

1. Enter the harvested loss
Start with the total loss you are evaluating before any modeled use.

2. Allocate the amount offsetting gains
Enter the portion assumed to offset taxable capital gains in your scenario.

3. Apply the gain tax rate
Use the rate appropriate to the gains being offset.

4. Allocate any ordinary-income offset
Enter only the amount you intend to model as usable against ordinary income, then provide its tax rate.

5. Review unused loss
Any amount not assigned to either use remains in the breakdown as loss not currently modeled as used.

Estimated tax reduction = (Gain offset × Gain tax rate) + (Ordinary-income offset × Ordinary tax rate); Unused modeled loss = Harvested loss − Gain offset − Ordinary-income offset

The calculator requires the two modeled offsets together to be no greater than the harvested loss. It does not determine legal deductibility or carryforward treatment.

What the result means

The result is the estimated reduction in current tax attributable to the loss amounts and rates you explicitly assigned.

IRS rules govern netting, carryforwards, and wash sales; confirm actual treatment with the current forms and guidance applicable to your return.

Given: harvested loss $18,000; $12,000 offsets gains taxed at 15%; $3,000 is modeled against ordinary income taxed at 24%.

Calculation: Gain-related reduction = $12,000 × 0.15 = $1,800. Ordinary-income reduction = $3,000 × 0.24 = $720. Unused modeled loss = $3,000.

Result: Estimated current tax reduction = $2,520.

Why do I enter the ordinary-income offset manually?

The amount available for that use depends on tax rules and your return. Manual input avoids assuming that the entire remaining loss receives ordinary-income treatment.

Can the gain and ordinary offsets exceed the harvested loss?

No. The page blocks that combination because the same loss dollars cannot be counted twice in this simplified allocation.

What happens to the unused loss shown?

It is simply the part not included in the current calculation. Whether it can be carried forward or otherwise used depends on applicable tax rules.

How does a wash sale affect this estimate?

A disallowed wash-sale loss may not produce the current deduction assumed here. IRS Publication 550 describes the wash-sale rules and basis adjustments.

Does this calculate state taxes or NIIT?

Not separately. You can incorporate a combined effective rate if appropriate for a scenario, but the page does not determine eligibility or separate federal, state, and surtax components.