It's important to prioritize the investment merits over any potential tax benefits when making portfolio adjustments, Fidelity's Munro said.
"Think about how that fits into the whole picture and think about your portfolio, as well. Do you want to be hanging on to this investment for the long term? And if it doesn't really fit into your portfolio, think about how you can take advantage of this loss," she said. Once losses have been applied to the current tax year, any excess losses can be carried back for up to three taxation years or carried forward indefinitely to offset future capital gains.Munro says it's relatively straight-forward to carry back losses for those that use electronic tax filing systems.
To reap any tax benefits for security in-kind donations, they need to be made to a registered charity , and a donation receipt needs to be issued."The gain associated with those donated units is eliminated on your tax return. And the individual gets a donation receipt for the fair market value of those donated securities."