Performing Forced Tax-Loss Harvesting (Smartleaf)

Performing Forced Tax-Loss Harvesting (Smartleaf)

NOTE: The following documentation applies only to AdvisorEngine clients utilizing the Smartleaf integration.

The Forced Tax-loss Harvesting feature allows you to force the sale of tax lots with losses to meet a specified dollar amount, and then preserve those losses until a specified date.

Notes:

  • When Forced Tax-Loss Harvesting is utilized, Smartleaf will attempt to harvest the designated dollar amount of losses. If the desired amount of losses cannot be realized, the analysis will not fail, but a note will appear in the Analysis History report on the Data/History tab.
  • The accompanying expiration date effectively sets the account’s tax budget to $0. This is to ensure that the account does not incur capital gains during the given timeframe.
  • If there are other mandated sales that require additional gains to be realized, the system will seek additional losses to offset them. It is normal for tracking error to increase as a result of forced tax-loss harvesting.

To enable forced tax-loss harvesting:

  1. Navigate to Manage Clients > Rebalancing.
  2. Search for and open the account to perform Tax Loss Harvesting on.
  3. Click the Requests tab.
  4. On the far right, click Edit Requests.
  5. Expand the Forced Tax Loss Harvesting section.
  6. Fill in the Preserve losses until date, Short and Long Term amount, and Short Term Only amount fields.
  7. Click Save and Re-Analyze when finished.

Full feature details: Forced Tax-loss Harvesting PDF.

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