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Tax-loss harvesting is a technique often used by investors to use realized losses on some of their investments to offset investment gains or ordinary income. Tax-loss harvesting is typically thought of as something to focus on near year-end, but financial advisors should work with their clients to harvest tax-losses throughout the year as appropriate. For clients with taxable investments, tax-loss harvesting should be a tool advisors can use in managing portfolios during the year.
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