# Tax-Loss Harvesting

*Taxes — Finicade finance glossary*

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.

**Also known as:** loss harvesting, crystallising losses

**Related terms:** [Capital Loss](https://finicade.com/glossary/capital-loss), [Wash Sale Rule](https://finicade.com/glossary/wash-sale-rule), [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [Cost Basis](https://finicade.com/glossary/cost-basis), [Robo-Advisor](https://finicade.com/glossary/robo-advisor)

Source: https://finicade.com/glossary/tax-loss-harvesting