Hi, can someone explain the underlined section of the statement below? Thank you.
“It is important to understand that the tax savings realized in a given tax year from tax loss harvesting overstates the true gain.”
The tax savings is just on temporary basis. What you saved in current year, you will pay next year.
exactly. it’s bascally a deferred tax liability.
If you execute trades, it’s a DTL. If you have non-realized losses which are not tax deductible in some countries (like mine), it’s a DTA until the positions have been executed in the next period but until the amount of previously non-realized loss.