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Smart Year-End Tax Moves to Limit Your 2016 Tax Bill

Source: nasdaq.com - Nov 11, 2016

This is the time of year when many of us take stock of our lives, and it's not a bad idea to apply that same introspection to your investment portfolio. The stock market has been surprisingly resilient, but that doesn't mean everything in your portfolio escaped unscathed. Some last-minute trades could lower your 2016 tax bill, and you may be able to reap some tax-free profits, too.

If you have stocks or mutual funds in a taxable account that have fallen from the price you paid, you can sell them and use the losses to offset profits you've locked in from selling other investments during the year. Losses will also come in handy if you have unexpected distributions from your mutual funds. Every December, funds pay out dividends and capital-gains distributions that have built up during the year. In taxable accounts, such payouts are taxable, even if you reinvest them in additional shares.

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Category: General Business