Investors pulled out a record amount of money from stocks last week as part of a financial strategy that lowers tax bills, Bank of America said Friday. 

Outflows from equities skyrocketed to $41.9 billion, the largest ever amount for "tax-loss harvesting," said the investment firm said in its weekly Flow Show note, the last one to close out a bruising year for stocks. 

Under tax-loss harvesting, investors sell securities such as stocks, ETFs, and mutual funds at a loss and then use that loss to offset any capital gains.

There would be benefits to harvesting losses even if an investor didn't have any gains, as the losses can be used to offset income or future gains, according to Fidelity.

BofA said investors in the past week pulled out $10 billion from bonds. They also took out $27.8 billion from passive equities and $17.2 billion from US value funds, setting new records for each. 

And investors reduced cash holdings by $59.5 billion, the most significant cut since February. Fund managers had ramped up cash levels in February and in March as they grew nervous about risks from Russia's war in Ukraine, slowing global growth, and elevated inflation.