Tax Arbitrage
Because the IRS taxes different types of income at different rates, you can utilize tax arbitrage to access lower tax rates.
For example, long-term capital losses are typically used to offset log-term capital gains, allowing you to avoid paying long-term rates (up to 23.8%) on those capital gains. If you can delay realizing those gains, you can let long-term capital losses offset short-term capital gains and ordinary income (up to 40.8%).
This strategy can add tax alpha because any leftover long term capital losses can be deducted against ordinary (up to $3,000 per year). Whenever possible, pairing long-term losses with short-term gains and ordinary income maximizes the value of those losses.