Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Margaret Giles.

The U.S. market has been red-hot, so there's a good chance that your investment portfolio has made some significant gains this year. But you might have to brace for a hefty tax bill if you hold those investments in a taxable

account.

Tax loss selling might help you lower that tax bill, but you have to do it right.

Christine Benz is Director of Personal Finance and Retirement Planning for Morningstar.

We talk about how tax loss selling works and who it works for, as well as where

investors might find loss opportunities in their portfolios. Here's our conversation.

Well, thanks for being here today, Christine. I really appreciate it. Margaret, it's great to see you.

All right. So I want to talk about tax loss selling. It's kind of relevant for this time of year.

So let's start with the basics. What is tax

loss selling? And who should really be thinking about it? So tax loss selling means that you're

going to take a look into your portfolio and look for securities that are now selling at a price

below what you purchase them at or your cost basis. So in terms of

who should be looking at tax loss selling, well, it is an activity that will be almost exclusively

focused on your taxable accounts. So if you have tax sheltered accounts, technically you could do

tax loss selling, but you'd have to liquidate your whole

IRA in order to engage in tax loss selling, so not recommended for most people. This is generally

if you have taxable brokerage accounts, the ideas that you are looking into your account,

seeing if you have losses in that portfolio.

And the reason to consider it, especially in a year like this year, where a lot of people

have gains in their portfolio, is that you can use those losses to offset capital gains

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