Enquiring minds want to know.
When SoFi Wealth rebalances your portfolio, you will usually take some profits or losses on any securities that are sold. Capital gains and losses are the income tax implications of selling an investment. A capital gain occurs when the price you sell your asset for is greater than the price you paid for it. If you make money on a sale, that money you make on the sale is taxed as a capital gain. Conversely, a capital loss occurs when the purchase price of the asset is greater than the price you sold it for, meaning you lost money. Generally, in a taxable (non-IRA) account, expect to pay tax on your gains. Long-term capital gains, on assets held longer than one year, are taxed at a lower rate than ordinary income. You may be able to deduct your losses against any gains from other transactions and – to a limited degree – against other income. The rules are complicated and we don’t give tax advice. We recommend that you discuss the issue with a tax consultant to ensure you understand the rules.