Tax Loss Harvesting and Teaching Your Spouse Investing

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LikeYouImagine
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Tax Loss Harvesting and Teaching Your Spouse Investing

Post by LikeYouImagine » Tue Jun 25, 2019 10:15 am

Has anyone successfully taught their spouse how to tax loss harvest (TLH) to the point their spouse can do it themselves?

Over the past couple years, I've simplified our investment finances to effectively a 3 fund portfolio in our IRAs and 401ks, using i Bonds for our emergency fund, and having money market funds for short term savings at Fidelity. One of the major goals of this has been to teach my spouse to manage our finances. I want her to be able to manage the finances if something happens to me, and her to be financial literate so we can make long term financial decisions together.

We've recently received an inheritance that now pushes us to do taxable long term investing as we are maxing out our tax advantaged accounts. I've been researching TLH extensively the past week, and I've come to the conclusion that it is in opposition to me successfully having my spouse be able to manage our finances.

Has anyone else dealt with the decision to TLH in this context?

livesoft
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by livesoft » Tue Jun 25, 2019 10:21 am

Sure. My spouse was in 2 investment clubs back in the 1990s. She has no problem with running any investments and using tax prep software if she wanted to. I have no problems doing the things she normally does as well if I wanted to.

"The market seems to be down this month. Do we need to do any tax-loss harvesing?"

The reality is that after a couple of years with no additions, there are really no TLH opportunities. That's what happens in retirement (or after an inheritance) when one is no longer contributing to a taxable account.
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MotoTrojan
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by MotoTrojan » Tue Jun 25, 2019 11:09 am

Just buy at a market low and you’ll never have to worry about it ;).

TLH would be the last thing I’d worry about personally. The gain is so marginal compared to tax-efficient fund placement and withdrawal strategies, asset allocation, etc. I would not include TLH in my plan and I hope my taxable assets are so far in the black when I pass that it won’t matter.

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goingup
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by goingup » Tue Jun 25, 2019 11:39 am

Tax loss harvesting is a tax tool. I really don't think it's critical for successful investing. Some people here don't bother with it at all.

I wouldn't make the ability to TLH the litmus test as to whether your spouse (or you) can be successful investors. Spend your energy making sure everyone knows how to log into all accounts and how to transfer funds in and out. It's important to understand the differences between IRAs, 401Ks, and taxable accounts.

crre
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by crre » Tue Jun 25, 2019 11:51 am

i'm working off the assumption that my husband will never be able to handle his finances alone. he agrees. so the plan is that if i go first, he turns everything over to the kids to manage for him.

EdNorton
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by EdNorton » Tue Jun 25, 2019 1:57 pm

Don't forget about tax gain harvesting of you are in the zero percent tax bracket for LTCG. Get a step up in basis.
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ohai
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by ohai » Tue Jun 25, 2019 1:58 pm

I don't even know how to start. Best approach would be to give spouse a bunch of those popular investing books and start from there.

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LikeYouImagine
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by LikeYouImagine » Wed Jun 26, 2019 10:19 am

Thanks for the replies. After seeing these responses and thinking it through more, I discussed the topic with my spouse and we agreed the additional learning curve and complexity outweighed the marginal benefit. :D

MotoTrojan
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by MotoTrojan » Wed Jun 26, 2019 10:48 am

LikeYouImagine wrote:
Wed Jun 26, 2019 10:19 am
Thanks for the replies. After seeing these responses and thinking it through more, I discussed the topic with my spouse and we agreed the additional learning curve and complexity outweighed the marginal benefit. :D
Not to mention the risk. “Oops I swapped Total US for a 3x inverse S&P500 fund and didn’t realize for years”.

retiredjg
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by retiredjg » Wed Jun 26, 2019 11:34 am

LikeYouImagine wrote:
Tue Jun 25, 2019 10:15 am
I've been researching TLH extensively the past week, and I've come to the conclusion that it is in opposition to me successfully having my spouse be able to manage our finances.
Tax loss harvesting is a great and wonderful thing, but it is not a necessary procedure for a successful investor. Do not worry about this.

mhalley
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Re: Tax Loss Harvesting and Teaching Your Spouse Investing

Post by mhalley » Wed Jun 26, 2019 5:21 pm

It would be pretty much impossible to teach this to my wife. She just has no interest in investing or finances.

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