what is tax loss harvesting 
tax loss harvesting is a strategy in which an investor sells an investment at a loss replaces it in their portfolio with a similar investment and uses the capital loss to offset their gains or other income tax loss harvesting is legal but investors cannot run afoul of wash sale rules which prohibit buying a substantially similar security within 30 days of selling can a business claim an nol carryforward on its state taxes state laws on nol carryforwards vary some follow the federal rules while others set different dollar caps or time limits for carryforwards 9 similarly state laws on capital loss carryforwards can differ from federal ones the bottom linebusinesses and individuals typically prefer profits to losses however losses have one upside the ability to use them to offset gains sometimes years into the future through a carryforward the irs provision provides tax relief when a company or individual loses money in a particular tax period 