If you have short term and long terms gains for the year, and are thinking of selling a stock at a loss to?

Question

offset these (and of course because you want to sell the stock anyway), is it better to take a short term loss or a long term loss? The holding period is right on the edge, so I could sell now for short term loss or hold on for another two weeks, then sell for a long term loss. Normally, long term is preferable, but long terms gains are taxed at a lower rate than short term gains, so it seems reducing the short term gains may be preferable in this case. (Assume stock will remain at constant price, and that the loss will reduce neither the long nor short term gains below zero.) Thank you.

Answer 1

If the loss you'll take is larger than the total of the two gains, then it won't matter - they'll all net out before taxes are calculated. If the loss is smaller that the total gain, then short term for at least enough to wipe out the short term gain would be preferable.