livesoft wrote:We have no cash and no fixed income in taxable. If we need some money for expenses, then we sell equities to get spendable cash. It doesn't matter if equities have
(a) gone up, because we have tax-loss harvested and with carryover losses, we would have no net capital gains and would pay no taxes,
(b) gone down, because we are going to repurchase the same equities in our tax-deferred accounts at the same price for no net change,
(c) stayed the same.
What is the recommendation for folks that consider (a) the main problem, where they don't have sufficient carryover losses to cover new realized capital gains and therefore would have to pay taxes, which may also limit their ability to make Roth conversions in early retirement without bumping them into a higher tax bracket?
For those folks, during their last few years of work should they start building a larger cash equivalent position in their taxable account, and buy equities in tax advantaged accounts as needed to maintain their asset allocation?
Also if future TLH opportunities occur in the taxable account, then sell in taxable (add to their cash equivalent position in taxable) and buy similar equity position in tax advantaged.