My Experiment with Tax Loss Harvesting Microsoft - Part 2



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About a month ago I decided to run a little experiment with tax loss harvesting: I was going to sell my shares of Microsoft at a loss and then rebuy them a month later, thus giving me the ability to claim the loss on my taxes next year.

Now that the experiment is over, I don’t think I would employ this strategy again.

Here’s the numbers:

Over time, I acquired 1.008562 shares of Microsoft at an average price of $307.79 - meaning I spent a total of $310.43.

On November 4th, 2022, I sold those shares at an average price of $217.22 for a total of $219.08.

That means I lost $91.35 (the difference between my $310.43 buying and $219.08 selling.

I had hoped the price would drop - or at least stay the same. But look at this chart from Yahoo Finance:

a stock chart captured from https://yhoo.it/3vpuoc8

The price went up! Plus, that D is a Dividend I missed - 68¢ per share. (I don’t think I owned enough to get even a penny more.)

I did end up rebuying a single share on December 5, 2022 for $241.00.

A couple weeks later I notice I still had a buck-oh-five (i.e. $1.05) in my account, and that MSFT had dropped a bit more, so I bought 0.004397 shares at $238.80 with that dollar and nickel.

So how much did I save, tax-wise?

I’m in the 22% tax bracket (plus I’ll have some short-term gains that’ll be taxed at that rate to offset) so my $91.35 loss saves me $20.10 on taxes next year.

Figuring out how much I lost with the two rebuys involves finding the difference between how much I spent rebuying and how much I made when I sold:

($241.00 + $1.05) - $219.08 = $22.97

So, in other words, I spent $22.97 to save $20.10 on taxes.

Not worth it. But interesting, nevertheless.$20.10

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