Tax-loss harvesting in wacky Washington State

Long-term losses are oddly valuable

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This article is educational content. Please work with a tax adviser.

I have lived in Seattle, WA, since 2013. At the time, the state had a high sales tax, but no capital gains or income tax.

Then the legislature introduced Chapter 82.87 RCW CAPITAL GAINS TAX in 2021, and the WA Supreme Court upheld it in 2023.

I keep track of legislative happenings in WA State using a little home-built dashboard.

There’s an interesting wrinkle that materially impacts Washingtonian investors who use tax-loss harvesting strategies.