Fortune Magazine’s tenth rule for building wealth is appropriate as the end of the year approaches. The magazine suggests taking advantage of a tax rule that lets investors deduct $3,000 of a realized loss from any realized gains. Since you are taxed 15% on realized gains from stocks, bonds and mutual funds held for at least a year, taking this deduction can reduce the total tax bill.
There is complete information about the capital gains tax on SmartMoney.com.
This rule won’t work for me. Almost all of my investments are in retirement accounts, tax deferred or tax free. In my non-tax deferred accounts, all of my investments have appreciated since the beginning of the year, and I haven’t sold any investments. I’ll be looking for other ways to reduce my taxes.
Published or updated December 21, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.