Tax-Loss Harvesting
Also called: loss harvesting, crystallising losses
Tax-loss harvesting is deliberately selling losers to realise losses that offset gains, then reinvesting in something similar to stay in the market. It converts volatility into a real, storable tax asset. Two constraints define it: the wash-sale rule bars repurchasing a substantially identical security within 30 days, and it only defers rather than eliminates tax, since the replacement carries a lower cost basis.