proud member of reddit's wall street bets and that remaining amount could be deducted against your earned income up to three thousand dollars a year and any amount above that could be carried forward into future years so let's just say you bought into corsair gaming and now you have a sixty nine hundred dollar loss well if you have no other investment profits you could reduce your taxable income by three thousand dollars in the first year three thousand dollars in the second year and nine hundred dollars in the third year until your loss is completely deducted NUMBER_TOKEN however there are a few rules when it comes to this and a few very important pitfalls you must avoid if this is to be done correctly but before we go into that i want to say a huge thank you to the sponsor of today's video wealthfront for those not aware wealthfront is an automated investment platform that utilizes software to help find the optimal portfolio to grow your money long term after all even though it's fun to buy and sell individual stocks it doesn't have to be one or the other and wealthfront allows you to manage and automate your diversified long-term investments in a way that becomes the foundation of your portfolio in an easy set it and forget it approach they start by asking you questions about your goals risk tolerance and investment preferences and then they take care of the rest all with just a few minutes of work they also automatically use a strategy called tax loss harvesting that can lower the taxes that you pay without any additional work on your end and NUMBER_TOKEN of their clients using the standard recommended portfolio have had their advisory fees fully covered by that tax loss harvesting service alone plus wealthfront just added hundreds of new investment options so that you have even more of a choice to build a portfolio that you're excited about and they just launched a youtube channel with helpful tips on personal finance everyday investing in home ownership not to mention as long as you hit the like button they've agreed to waive their NUMBER_TOKEN annual management fee up to the first NUMBER_TOKEN NUMBER_TOKEN for life just by using the link down below in the description so as we approach the end of the year if you're interested in learning more and signing up feel free to use that link down below in the description sign up and you could get started with as little as NUMBER_TOKEN so thank you guys so much now with that said let's get back to the video alright so in terms of doing a successful tax loss harvest like i mentioned there are a few rules that you have to abide by and the first is known as what's called a wash sale this is when you sell a stock for a loss use that loss to offset a gain and then immediately go back in and buy that same stock you sold for a loss within a NUMBER_TOKEN-day window the irs does not allow that because otherwise everybody would be selling their losing stocks as soon as they could and then just continually buy back in so you can't do that however there's nothing that says you can't go and immediately buy a different stock right afterwards even if it's in the same category so for example i could sell robinhood and then immediately go and buy another stock brokerage like charles schwab it's also totally fine to immediately buy back in that same stock you sold for a profit to increase your tax basis that's because it's only the losses that apply to that NUMBER_TOKEN-day rule the second rule is that the type of loss will first offset that same type of gain and i know that sounds
START_SPONSOR_TOKEN but before we go into that i want to say a huge thank you to the sponsor of today's video wealthfront for those not aware wealthfront is an automated investment platform that utilizes software to help find the optimal portfolio to grow your money long term after all even though it's fun to buy and sell individual stocks it doesn't have to be one or the other and wealthfront allows you to manage and automate your diversified long-term investments in a way that becomes the foundation of your portfolio in an easy set it and forget it approach they start by asking you questions about your goals risk tolerance and investment preferences and then they take care of the rest all with just a few minutes of work they also automatically use a strategy called tax loss harvesting that can lower the taxes that you pay without any additional work on your end and NUMBER_TOKEN of their clients using the standard recommended portfolio have had their advisory fees fully covered by that tax loss harvesting service alone plus wealthfront just added hundreds of new investment options so that you have even more of a choice to build a portfolio that you're excited about and they just launched a youtube channel with helpful tips on personal finance everyday investing in home ownership not to mention as long as you hit the like button they've agreed to waive their NUMBER_TOKEN annual management fee up to the first NUMBER_TOKEN NUMBER_TOKEN for life just by using the link down below in the description so as we approach the end of the year if you're interested in learning more and signing up feel free to use that link down below in the description sign up and you could get started with as little as NUMBER_TOKEN so thank you guys so much now with that said let's get back to the video END_SPONSOR_TOKEN