When markets pull back, smart investors don't just sit on losses — they harvest them. We identify, execute, and document tax loss harvesting strategies that offset capital gains and reduce your tax bill, legally and systematically.
How It Works
Tax loss harvesting is one of the most powerful and underused strategies available to investors. Here's the concept and why it matters.
When an investment in your portfolio drops below what you paid for it, you're sitting on an unrealized capital loss. Most investors hold and hope — but there's a smarter move: sell the position to lock in the loss, then immediately reinvest in a similar asset to maintain your market exposure.
The realized loss can then be used to directly offset capital gains from other investments — reducing the taxes owed on those gains dollar for dollar. If your losses exceed your gains, up to $3,000 can offset ordinary income, with any remaining losses carried forward indefinitely.
The key to doing it correctly: complying with the wash-sale rule (no repurchase of the same or substantially identical security within 30 days), proper documentation, and strategic timing relative to short-term vs. long-term gain rates. We handle all of it.
*Simplified example. Actual savings depend on tax bracket, holding periods, and specific positions. Short-term gains taxed at ordinary income rates can produce significantly higher savings.
Asset Classes
Harvesting isn't limited to stocks. We identify opportunities across your entire investment picture.
The most common harvesting opportunity. We identify positions with unrealized losses, recommend comparable replacement securities, and execute within the wash-sale window. Particularly valuable in volatile years.
Crypto is not subject to wash-sale rules (as of 2024), making it the most aggressive harvesting opportunity available. You can sell Bitcoin at a loss and repurchase immediately — locking in the tax loss with zero waiting period.
Investment properties sold below purchase price generate capital losses. REIT positions can also be harvested. We coordinate real estate losses with your overall capital gains picture for maximum offset.
Fixed income positions and actively managed funds can generate harvestable losses, especially in rising rate environments. We audit your full portfolio — not just the obvious positions.
Equipment, vehicles, and business property sold below book value creates Section 1231 losses — which can offset business gains or, under certain conditions, be treated as ordinary losses (more valuable than capital losses).
Losses that exceed gains in the current year carry forward indefinitely. We track your carryforward balance and plan future asset sales strategically — timing realizations to maximize how those banked losses are deployed.
The Rules
The #1 mistake investors make is triggering the wash-sale rule and losing the tax benefit entirely. Here's what you need to know — and how we protect you from it.
Buying the same or "substantially identical" security within 30 days before or after the sale that generated the loss. This disallows the loss — you don't get the tax benefit. Applies to your IRA accounts too, which catches many investors off guard.
Replace with a similar but not identical asset: sell VTSAX (Vanguard Total Stock), buy FSKAX (Fidelity Total Market). Same market exposure, different fund. Or wait 31 days and repurchase the original. We identify compliant replacement pairs before every transaction.
As of 2024, cryptocurrency is classified as property — not a security — so the wash-sale rule does not apply. You can sell Bitcoin, Ethereum, or any crypto at a loss and repurchase the same day. This makes crypto one of the most powerful harvesting tools available right now.
When to Harvest
Harvesting isn't just a year-end exercise. We monitor your portfolio throughout the year for opportunities.
Any 10%+ market drop creates harvesting opportunities across broad index positions. We flag these in real time so you don't miss the window.
October–December is prime harvesting season. We review your full portfolio and realized gains before year-end and execute harvesting transactions before December 31.
Selling a business, rental property, or concentrated stock position? We harvest available losses first to offset the incoming gain before you close.
When your portfolio needs rebalancing, we coordinate it with harvesting — reducing tax drag on the rebalance while maintaining your target allocation.
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