A »Tax-loss harvesting involves selling investments at a loss to offset capital gains tax from profitable investments. For example, if an investor sells Stock A at a $1,000 loss and Stock B at a $1,000 gain, the gain is offset, reducing taxable income. This strategy can improve overall returns by minimizing tax liabilities, but investors should be mindful of "wash sale" rules, which prohibit buying the same security within 30 days.

A »Tax-loss harvesting involves selling securities that have declined in value to realize losses, which can offset gains from other investments and reduce tax liability. By offsetting gains with losses, investors can minimize their tax burden and potentially increase their after-tax returns.