to lower their tax amount with the use of investment losses. Tax loss harvesting can be done throughout the fiscal year, allowing investors to "offset capital gains with capital losses." If an investor has more capital losses than gains in a year, that year they can use up to $3,000 as a deduction to "offset ordinary income", with the remainder carrying over into future years if unused. Loss harvesting defers taxes, but doesn't eliminate them, and is essentially receiving a loan without interest from the federal government, assuming marginal tax rates are the same. If marginal rates are different, then there can be additional tax savings (e.g., deducting excess losses against a higher ordinary income rate in one year in exchange for additional long term capital gains tax at a lower rate in a later year) or even a tax penalty (e.g., deducting at a lower capital gains tax rate in several years in exchange for a much larger gain in one later year that puts one in a higher capital gains tax and Medicare investment income tax bracket.) Most simply, if "tax-loss harvesting is not done properly, it will create a wash-sale that will eliminate the tax benefits of the buying and selling". The investor can employ a number of techniques to avoid triggering the wash sale rule. The investor can wait 30 days to repurchase the security. The investor can purchase a security that is similar to the original, but that does not meet the IRS's definition of "substantially identical". For example, an investor can sell an ETF and buy another with similar investment objectives. Most tax loss harvesting historically has been performed in December. Tax-loss harvesting is still most common in the year's fourth quarter. The practice has been both praised and criticized by investors, as deferring the taxes can result in higher rates later on relating to capital gains. Investment companies The IRS has published no exact definition of what constitutes a "substantially identical" security. Therefore, it is not clear whether or not the securities of different investment companies can be "substantially identical", even if their investment objectives are identical. As a result, if an investor trades in and out of ETFs or mutual funds with almost identical holdings, some have held that it does not trigger the wash sale rule. For example, State Street's SPDR S&P 500 ETF (NYSEARCA: SPY) and iShare's Core S&P 500