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Tax Management

Active tax-management can lower your tax bill and may improve your after-tax investment returns.

We provide active tax-management, combining tax-loss harvesting and gains deferral in the context of your unique tax budget and asset allocation. 

This process potentially saves you more than many advisors charge in fees.

Tax-management starts right from the beginning with the transition of any existing investment accounts you already have. Our tax and risk-sensitive transition process allows us to efficiently navigate to your desired portfolio while balancing taxes, transaction costs, and risk.

Tax Management Tools

There are a number of tax management strategies that we may implement on your behalf:

Active Tax Management

1. Tax Budget

You can set the maximum amount of capital gains taxes you are comfortable paying per year. We’ll look across your portfolio to determine how to best spend your “tax budget."

2. Tax-Loss Harvesting

If securities decline in value, you can get what amounts to a small rebate by selling the security and buying a substitute, then using these losses to offset gains from elsewhere in your portfolio. If you don’t have any gains to offset today, you can bank these losses for use at a future date. We monitor your portfolio daily, looking for ways to lower your taxes through active tax-loss harvesting. 

3. Capital Gains Deferral

Avoiding capital gains taxes is important. So is keeping your portfolio risk characteristics in line. We carefully compare these competing considerations. When we do hold an overweight appreciated position to avoid taxes, we try to counterbalance the risk by underweighting similar securities.

4. We Follow the Wash Sale Rule 

In order to get the tax benefits of tax-loss harvesting, IRS rules require that you not repurchase the security you sold within 30 days (you also can’t have purchased extra shares in the 30 days before the sale). We make sure to follow these rules. When we harvest losses, we reinvest the proceeds of the sale into similar securities in order to keep your portfolio on track. After the 30-day wash-sale period is over, we’ll look to move your position back to the original investment, as appropriate.

All clients receive a report documenting estimated Taxes Saved or Deferred. See a sample report.

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