Performing Ongoing Tax-Loss Harvesting

Performing Ongoing Tax-Loss Harvesting

Firms utilizing the Smartleaf integration may manually set accounts to deliberately perform tax-loss harvesting throughout the year.

Note: Ongoing Tax-Loss Harvesting is a premium Smartleaf integration feature. Contact AdvisorEngine Sales if you need to upgrade your integration subscription.

Harvesting Profile Options

Two profile options are available as described here.

(Default) Year-Round with Year-End Increase

The default loss harvesting profile. Smartleaf will seek to actively harvest losses at an increasingly aggressive rate over the course of the year. Typical loss harvesting thresholds range from roughly 80% of basis at the beginning of the year to as high as 95% by December 1.

Please note that the default profile may be updated in the future, at which point users will be notified in advance of any changes.

The profile thresholds are not absolute. Smartleaf’s loss harvesting decisions also depend on the following additional factors: time to year-end, time to lot purchase anniversary, security volatility, transaction costs, position size, and the amount of tracking error (if any) that will be introduced.

No Active Loss Harvesting

Disables active loss harvesting. Smartleaf will not actively seek out loss harvesting opportunities, but will still seek to minimize taxes by deferring gains.

Although Smartleaf will not actively seek out loss harvesting opportunities for accounts with this profile, the system may still recommend sales at a loss.

Enabling Ongoing Tax-Loss Harvesting

  1. Navigate to Manage Clients > Rebalancing.
  2. Search for and open the account to a tax budget for.
  3. Click the Profile tab.
  4. On the far right click Edit Profile.
  5. Expand Taxes.
  6. Adjust the Tax Loss Harvesting Profile drop-down as needed.
  7. Click Save and Re-Analyze at the bottom to commit your changes.

Full feature details: Ongoing Tax-Loss Harvesting PDF.

    • Related Articles

    • Performing Forced Tax-Loss Harvesting

      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 ...
    • Setting an Annual Tax Budget

      Firms utilizing the Smartleaf integration can set an annual tax budget on an account to prevent trades from generating taxes beyond the allowed amount. For each portfolio, users can specify the maximum amount of taxes (not capital gains) that should ...
    • Performing a Manual Buy or Sell

      Firms utilizing the Smartleaf integration can create a specific buy or sell for an account. Requests to Buy or Sell Securities allow users to mandate that Smartleaf buy or sell specific amounts of specific securities as a part of its trade ...
    • Defining Substitute Securities

      Firms using the SmartLeaf integration can define Substitute Securities for any Instrument they’ve created to assist in tax loss harvesting or legacy fund handling. Note that Named Substitutes can only be designated for ETFs and Mutual Funds. Note: ...
    • Report Packager Page Library

      This article describes all the available Report Pages that can be added to a Report Package when Creating Report Packages. Available Page Library: Activity Detail Activity Summary Cover Page Custom Advisor Letter Disclaimer Page Holdings Report ...