President of Product & Growth of Dropbox, and on the Board of Directors at Acorns. He’s currently the CEO and co-founder of Daffy, a not-for-profit community built around a new, modern platform for giving. Why would someone want to sell an investment for a loss? This question is particularly relevant in a year when the stock market has not been kind to many investments. The primary reason people sell investments at a loss is to take advantage of the tax deduction. Our tax system allows for deductions when you lose money on an investment. However, the IRS defines a wash sale as selling an investment and buying it back within 30 days, which disqualifies you from the tax deduction. But there's a workaround. If you own index funds, you can sell one and buy a different one exposed to the same index. This way, you maintain your portfolio's exposure without triggering the wash sale rule. For instance, if your Vanguard S&P 500 fund is down 20%, you can sell it, take the loss, and buy back the Charles Schwab S&P 500 fund. This strategy is part of what's known as tax loss harvesting, a method used to reduce your taxable income by taking advantage of investment losses. It's a complex process, and it's essential to consult with a tax professional to assess your specific situation. This is where Daffy comes in. As a Donor Advised Fund (DAF), Daffy provides a modern platform for giving. With Daffy, you can easily donate to almost every US public charity, track tax-deductible contributions, and access donation receipts all in one place. Daffy waives all membership fees for members with less than $100 in their fund, making it an accessible and cost-effective solution for managing your charitable giving and potentially offsetting investment losses. In conclusion, selling an investment for a loss can be a strategic move for tax purposes. And with Daffy, you can turn those losses into opportunities to give back, making it a win-win situation.