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Midyear tax tip #5:
Pay attention to your portfolio

Admit it. You still obsess about the stock market.

Paying continual attention to the ups and downs of your stocks will drive you crazy.

But sensibly assessing your portfolio and making appropriate moves now instead of at the end of the year could pay off at tax time.

That's Midyear Tax Moves tip #5, courtesy of @fcn who, when he's not Tweeting, posts as nickel at

Nickel's tax move to make now: Do some tax loss harvesting if you have any losing investment positions.

Stock market page (2) As the name indicates, you'll want to find the holdings that will result in a net loss when you sell them.

Why? If you also have any corresponding capital gains, you can use this crop of losses to offset them.

And if you have more capital losses than gains, you get to use up to $3,000 a year in your losses to reduce your ordinary taxable income.

A lot of people put off making tax moves until December. But if you have a stock that's tanked in value and it no longer fits your overall investing strategy, why keep it?

Sell now and use the proceeds for something else and book the tax loss for when you file your return.

More midyear tax tips on their way: Thanks to @fcn for the tax loss harvesting advice as part of the inaugural Midyear Tax Moves.

If you have a tax move we can make now to help reduce an upcoming 2010 tax bill, we'd love to hear from you. I'll be posting the tips, one each weekday until we run out.

If you're succinct, I'll take your tip via Twitter @taxtweet. Got a bit more to say, post it on the ol' blog's Facebook page.

And if you want a chance to win a New Yorker desk diary, check out the details here (the entry deadline has been extended to June 27).

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