This Week’s Topic: Tax Loss Swapping
In preparation for tax day, it is worth your while to consider “swapping” bonds in your portfolio that have dropped in value from the price you paid for them. Sell a bond at a substantial loss and buy a very similar, but not identical bond in exchange. Swapping bonds in your portfolio in this way may not materially change the portfolio’s overall value, but it may create a very useful tax loss. Is this the right strategy for you?
You should consult your professional tax advisor regarding your particular situation.