Investors trading stocks, bonds, foreign exchange, or investment funds frequently overpay capital gains taxes due to automatic bank withholding (Mas Bamakor) executed on a transaction-by-transaction basis without cross-year or multi-account loss offsetting.

6 Common Reasons Investors are Owed Tax Refunds:

  • Cross-Year Capital Loss Offsetting (Form 867): Realized losses in one tax year (e.g., 5,000 ILS loss) can offset taxable capital gains in subsequent years (e.g., 20,000 ILS gain), recovering 25% tax on the offset amount (reclaiming 1,250 ILS directly).
  • Trading via Multiple Banks or Brokers: Banks do not automatically offset losses incurred at Bank A against capital gains realized at Broker B.
  • Foreign Withholding Tax Credits: Dividend tax withheld abroad (e.g., US 25% SEC tax on 10,000 ILS dividends) can be offset against Israeli capital tax liabilities.
  • Marginal Tax Bracket Recalculation for Retirees (Age 60+): Investors over age 60 may apply lower marginal income tax brackets (starting at 10% or 14%) to capital gains instead of the standard 25% capital tax.
  • Inflationary Element Deduction: Capital gain portion attributable strictly to CPI inflation is exempt from real capital gains tax.
  • Unutilized Credit Points: Unutilized personal tax credit points (valued at 500 ILS or more) from employment gaps or personal circumstances can directly reduce capital gains tax liabilities.

Form 867 & Multi-Year Loss Offsetting

By compiling Form 867 from all domestic and international broker accounts over the past 6 tax years, our firm structures multi-year loss offset claims to recover overpaid taxes directly to your bank account.

Our firm conducts multi-year capital portfolio tax reconciliations covering Form 867 from all brokers to recover thousands of ILS directly from the Income Tax Authority.