Hey y’all! I have been thinking that this community could use a weekly discussion thread. Feel free to comment below with anything and everything money related that is better suited to a conversation or a quick question and answer than a full post. Some ideas include:
- Journaling about an ongoing job search
- Asking for ideas about how to manage an emergency fund
- Logging recent stock trades
- Talking about the impact of inflation on your budget
- Your plans for maximizing the rewards on a credit card
Again, those are just suggestions, if there’s really anything you’d like to talk about related to finance in your life, feel free to put it here.
My understanding of TLH is that it just delays taxes. You’ll have to pay them eventually, but possibly at a lower rate. It seems like a lot of work for a so-so potential benefit. If I had enough money for it to be worth the effort, I’d probably have enough money to pay some one (or a robot) to do it for me.
Generally, yes. It’s been a while since I’ve thought about it so the exact mechanics elude me, but I think you will be paying it later at a lower tax rate (e.g. your tax rate during retirement) only for each yearly 3k you deduct from your income. Your long-term/short-term losses from TLH still exist in a bucket waiting to be converted to 3k every year, and if you end up realizing stock gains at any point in your life, your remaining bucket losses will cancel them out before you realize those gains. For gains cancelled this way I think it’s a direct push, e.g. no tax difference?
Either way, it’s a small optimization, and totally worth skipping if you don’t care. Because you can only claim up to 3k per year (rolling), it’s just so easy to TLH 10-20k during a market downturn and coast off the 3k/year for a while. It’s something bogleheads do because there’s nothing else to do. It’s effort that you can turn into guaranteed money, which is rare when it comes to the stock market.