Capital Loss Harvesting Calculator

Capital Loss Harvesting Calculator – Offset Gains, Apply Limits and Estimate Tax Savings

The Capital Loss Harvesting Calculator helps you understand how realized capital losses can reduce your tax exposure by offsetting capital gains and, in some systems, other income. By combining current gains, harvested losses, prior year carryforward and your own annual deduction limit, the tool shows how much loss you can use this year, what remains to carry forward and how much tax you might save in total.

Many investors harvest capital losses strategically. Instead of holding losing positions indefinitely, they may sell them to realize the loss, then redeploy capital into a similar (but not identical) investment, depending on local rules. The realized loss can then be used to offset taxable gains and possibly reduce overall taxable income. This calculator brings the moving parts together so you can model scenarios before you act.

What Is Capital Loss Harvesting?

Capital loss harvesting is the process of realizing investment losses on purpose to create tax benefits. When you sell an investment for less than you paid, you create a capital loss. In many tax systems, you can use these losses to:

Offset capital gains in the same year.
Reduce taxable income up to an annual limit (if allowed in your jurisdiction).
Carry forward any unused losses to offset future gains.

The goal is not to lose money for its own sake. Instead, the idea is to cut or rebalance losing positions efficiently and let the tax system partially soften the impact, while staying invested according to your long-term strategy.

How the Capital Loss Harvesting Calculator Works

This calculator is intentionally generic so it can be used in different countries. You enter your own numbers and limits, and the tool performs a step-by-step offset calculation:

Combine short-term and long-term gains.
Add up all current-year losses and any prior year loss carryforward.
Offset gains with losses as far as possible.
Apply your chosen annual deduction limit against other income (if any loss remains).
Show leftover loss to carry forward into future years.
Estimate tax savings based on tax rates you provide.

This approach creates a clear view of how far your harvested losses can go in the current year and how much benefit is deferred to the future.

Inputs Used in the Calculator

Each field in the calculator is designed to reflect a core part of capital loss harvesting:

Short-Term Capital Gains: Gains realized on assets held for a shorter period, often taxed at a higher rate in some systems.
Long-Term Capital Gains: Gains on longer-held assets, sometimes taxed more favorably.
Short-Term Capital Losses (Current Year): Realized losses from short-term holdings.
Long-Term Capital Losses (Current Year): Realized losses from long-term holdings.
Prior Year Loss Carryforward: Unused capital losses brought forward from previous years.
Max Loss Deduction This Year: The maximum amount of net capital loss you plan to use (or are allowed to use) against other income this year, beyond offsetting capital gains. You control this number for your own country.
Tax Rate on Capital Gains (%): The rate at which your capital gains are taxed.
Tax Rate on Other Income (%): The rate used to estimate tax saved when losses offset general income up to your annual limit.

Calculation Logic Overview

For clarity, the calculator works in stages using simple arithmetic. All losses are entered as positive values.

Step 1: Total Gains and Total Losses

Total Gains = Short-Term Gains + Long-Term Gains

Total Losses = Short-Term Losses + Long-Term Losses + Prior Carryforward

Step 2: Offset Capital Gains with Losses

Losses are first used to offset capital gains:

Loss Used Against Gains = min(Total Losses, Total Gains)

After this step, remaining losses are:

Remaining Loss After Gains = max(Total Losses − Total Gains, 0)

If Total Gains are greater than or equal to Total Losses, all losses are absorbed and there is no remaining loss to carry forward from this part of the calculation.

Step 3: Apply Annual Deduction Limit

If your tax system allows you to use a portion of net capital loss against other income, this is governed by an annual limit. You control that limit in the calculator:

Loss Against Other Income = min(Remaining Loss After Gains, Annual Deduction Limit)

Any leftover loss beyond this amount moves into future years as carryforward:

Loss Carryforward = Remaining Loss After Gains − Loss Against Other Income

Step 4: Net Result Applied This Year

The calculator shows a combined “Net Result Applied This Year,” which treats losses used against gains and other income as applied in the current year:

Total Loss Used = Loss Used Against Gains + Loss Against Other Income

Net Result Applied This Year = Total Gains − Total Loss Used

If this number is positive, it represents net taxable capital gains after loss harvesting and any deduction against other income. If negative, it reflects a net deduction against income, subject to the limit you provided.

Step 5: Estimated Tax Savings

To estimate tax savings, the calculator uses the tax rates you supply:

Tax Saved on Gains ≈ Loss Used Against Gains × Capital Gains Tax Rate

Tax Saved on Other Income ≈ Loss Against Other Income × Income Tax Rate

Total Estimated Tax Saved = Tax Saved on Gains + Tax Saved on Other Income

These figures are estimates only and do not replace a formal tax calculation.

Example: Simple Capital Loss Harvesting Scenario

Consider the following situation:

Short-term gains: 3,000
Long-term gains: 7,000
Short-term losses (current year): 2,000
Long-term losses (current year): 1,500
Prior year loss carryforward: 1,000
Annual deduction limit: 5,000
Capital gains tax rate: 20%
Other income tax rate: 30%

Total gains are 10,000. Total losses are 4,500 from the current year plus 1,000 from prior carryforward, for a total of 5,500. Losses used against gains are 5,500 (the full amount), leaving no remaining losses to apply against other income. The net result applied this year is 10,000 − 5,500 = 4,500 of taxable capital gains.

Estimated tax saved on gains is 5,500 × 20% = 1,100. No additional tax is saved against income because there are no losses left after offsetting gains. Loss carryforward to future years is zero.

Example: Loss Carryforward After Annual Limit

Now consider a case in which losses are much larger than gains:

Total gains: 4,000
Total losses (including carryforward): 15,000
Annual deduction limit: 5,000

Loss used against gains is 4,000. Remaining loss after gains is 11,000. Loss against other income is limited to 5,000. The result is a total of 9,000 of loss used this year, and 6,000 carried forward. Net result applied this year is 4,000 − 9,000 = −5,000, which represents a net deduction against income equal to your annual limit.

Why Use a Capital Loss Harvesting Calculator?

Tax rules can be complex, but the underlying arithmetic of capital gains and losses is straightforward. This calculator helps you visualize that arithmetic in a clear, organized way:

See how much of your harvested losses will actually be used this year.
Estimate how much loss will carry forward into future years.
Model different annual deduction limits for different jurisdictions.
Run scenarios with different tax rates to understand potential savings.
Test the impact of realizing additional losses before year end.

By experimenting with different inputs, you can better understand whether harvesting additional losses is likely to change your current tax position or primarily benefit future years.

Important Considerations and Limitations

While this calculator provides useful insights, it does not implement every rule used in real tax systems. Some countries distinguish strictly between short-term and long-term categories, have specific ordering rules, or restrict how losses in certain asset classes can be used. Others enforce anti-avoidance rules such as wash-sale or superficial loss rules when you repurchase similar securities within a short period.

Because the tool is generic, it is your responsibility to:

Use the correct inputs for your country (gains, losses, limits and tax rates).
Respect any local timing, holding period and repurchase rules.
Confirm results with a qualified tax professional before making decisions.

The calculator is best used as an educational planning aid rather than an official tax computation engine.

How to Use This Tool Effectively

Gather your total realized capital gains and losses for the year, along with any prior year loss carryforward.
Enter values into the calculator using positive numbers for gains and losses.
Set an annual deduction limit that reflects the rules in your jurisdiction or your own planning target.
Enter your approximate tax rate on capital gains and on other income.
Review the net result applied this year, total loss used, carryforward and estimated tax savings.
Experiment by changing your harvested losses or annual limit to see how results would change.

Related Tools from MyTimeCalculator

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Capital Loss Harvesting Calculator FAQs

Frequently Asked Questions About Capital Loss Harvesting

Understand how to use harvested losses, apply annual limits and interpret the calculator’s results.

No. In many systems, losses are first used to offset gains and then applied up to an annual limit against other income. Any remaining loss is typically carried forward. The calculator shows both loss used this year and carryforward based on the limit you provide.

Yes. You can enter separate tax rates for capital gains and for other income. The tool uses those rates to estimate tax savings on both sides of the calculation, but these are still only estimates.

You can enter a very large number or simply the full remaining loss as your annual limit. The calculator will then treat all remaining loss as available for use this year, leaving no carryforward unless your losses are still larger than your chosen limit.

No. The tool only works with totals you provide and does not check whether trades qualify for loss treatment in your jurisdiction. You must ensure that any harvested losses comply with local regulations such as wash-sale, superficial loss or similar rules.

This calculator is intended for planning, education and scenario testing. It does not replace official tax software, forms or professional advice. Always rely on official guidance and experts when preparing actual tax returns.

You can model totals from many types of portfolios by entering the relevant gains and losses. However, business and corporate tax rules can be more complex than personal rules, so you should treat the results as a rough guide and verify them with a specialist.

Capital Loss Harvesting Calculator

Capital Loss Harvesting & Offset Calculator

Net Result Applied This Year

Total Loss Used This Year

Loss Carryforward to Future Years

Estimated Tax Saved