The information in this report is general in nature and may not apply to your situation. Tax laws or regulations are subject to change at any time and can have a substantial impact on your individual situation. Wells Fargo and its affiliates are not legal or tax advisors. Please speak with your legal or tax advisor before making any decision that may have tax consequences.
A tax-loss harvesting strategy, as discussed here, can potentially provide investors with the opportunity to reduce their tax liability. This practice also bears certain risks including, among others, the risk that the new security will not perform as well as the original investment, transaction costs could offset any potential tax benefit, and there may be unintended tax implications.
There is no guarantee that any tax-managed strategy will be successful and meet its objective of being tax-efficient. An investment in a mutual fund or ETF* will fluctuate and shares, when sold, may be worth more or less than their original cost. All investing involves risk, including the possible loss of principal and fluctuations in the value of the securities held.
*ETFs continuously offer and sell shares through a daily in-kind purchase and sale process to “authorized participants” and not to investors. As a result, the ETF does not incur tax when securities are sold and the investor does not incur capital gains taxes until they sell their shares.