Clients have called recently with the bad news that they are losing money in an investment scheme−perhaps stock options, perhaps a hedge fund, or another of today's riskier investments. Is there anything they can do, they wonder?

One thing to consider: If they have been holding investment real estate that they wish to sell with an eye to building a real estate portfolio that better suits their plans for the future, but they're worried about the tax liability from the sale of the investment, they might consider selling right away and using the other investment loss to counterbalance the gain from the sale of the real estate.

Long-term capital gains, after all, are decreased in any year by capital losses that may have been experienced. (Investors may also want to engineer a 1031 tax-deferred exchange, as an alternative, and use it to start building a more appropriate real estate portfolio.)

All of which is to suggest that those who are in such a position should contact their tax advisor very quickly and explore all possible alternatives. Better yet, plan your investment strategy with your real estate and tax advisors long before sticky questions arise! So call Beth at 425-450-5208 and visit her website at www.bethbillington.com.

Beth Billington is a Realtor® with Coldwell Banker Bain in Bellevue, WA.