Is it possible to add up multiple years small losses (let's say $200 lost each year in the period 2015-2021) and harvest them altogether in one year (in this case $1400 in losses for 2022)?
2 Answers
No
Income earned and expenses incurred must be accounted for in the tax year that they happened. Most tax systems allow overall losses (i.e. when total expenses exceed total income) to be carried forward to offset future earnings.
Depending on the nature of the taxpayer, accounting may be done on a cash or accrual basis. While income and expenses may occur in different periods depending on the basis, within the system you use, you can't move them to another period.
"Harvesting" is a phrase used almost exclusively in relation to capital losses (usually of securities) rather than other expenses. So, I will answer about capital losses.
Also, the "harvesting" is the act of selling the asset at a loss, not the act of claiming the losses together.
Yes, you can carry forward net capital losses to any future year:
You can use a net capital loss to reduce your taxable capital gain in any of the three preceding years or in any future year.
But the capital loss must be declared in the year that it occurred and must first be applied against any taxable capital gain in that same year. Any leftover becomes net capital loss that may be applied in any future year.
