· Kyle Milner, CPA · Tax Planning · 3 min read
2025 Last-Minute Year-End Tax Strategies for Your Stock Portfolio
Harvest losses, dodge wash-sale traps, and gift or donate appreciated shares before December 31 to shrink your 2025 stock tax bill.
Your stock portfolio can be a gold mine of tax planning opportunities before December 31. The goal: convert high-tax short-term gains (up to 40.8 percent) into lower tax or even zero tax outcomes using long-term capital gains rules (max 23.8 percent) and strategic timing.
Here are seven plays to consider before the year closes.
1. Use long-term losses against short-term gains
Identify stocks you’re ready to unload and use their long-term losses to offset short-term gains taxed at higher rates. Every dollar of long-term loss that wipes out a 40.8 percent short-term gain is a dollar that saves you roughly 17 percentage points in tax.
2. Create the $3,000 ordinary-income offset
If losses exceed gains, use up to $3,000 in capital losses to offset ordinary income (salary, business income, etc.). Your 23.8 percent long-term loss offsets income taxed at up to 40.8 percent-great leverage.
3. Respect the wash-sale rule
Sell at a loss and buy back substantially identical securities within 30 days? The loss is disallowed and added to the new basis. If you want the deduction in 2025, sell and wait more than 30 days before rebuying.
4. Trigger gains to use up loss carryovers
If you’re sitting on large loss carryovers, consider realizing capital gains-selling appreciated stocks, rental property, or other assets. Capital gains can be recognized immediately and repurchased (no wash-sale rule for gains), letting you absorb those losses.
5. Gift appreciated stock to family in lower brackets
Instead of giving cash, transfer appreciated shares to parents or adult children (not subject to kiddie tax). They sell, pay tax at their lower rate, and you remove future appreciation from your estate. In 2025 you can gift $19,000 per recipient ($38,000 with a spouse) without gift tax reporting.
6. Donate appreciated stock to charity
If you itemize, donate stock you’ve held longer than a year. Benefit 1: deduct the fair market value (subject to the 30 percent of AGI limit for public charities, with a five-year carryforward). Benefit 2: pay no capital gains tax on the appreciation.
Example: Stock bought for $1,000 now worth $11,000. Donate it and get an $11,000 deduction with zero tax on the $10,000 gain.
7. Sell losing stock before donating
Never donate stock that’s sitting at a loss. Sell it first, claim the capital loss, then donate the cash if you still want to support the charity. Gifting the loss stock forfeits the deduction entirely.
Want help mapping these strategies to your specific positions before December 31?
