How TaxHarvest Helps You Review Tax-Loss Harvesting Opportunities

TaxHarvest is software that reads data from brokerage accounts a customer connects and turns it into general tax-loss-harvesting estimates and suggestions. It can make tax lots, realized gains, and wash-sale timing easier to review. It cannot guarantee a tax benefit or decide whether a trade fits an investor's financial situation.

That boundary matters. Tax-loss harvesting is a tax-record and portfolio-implementation process, not a promise that a market loss becomes a gain. A useful workflow makes the inputs visible, explains the tradeoffs, and leaves the investor with the final decision.

Start With the Tax Facts Behind a Position

An account-level return can hide the tax result of individual purchases. One holding might be up overall while a more recent lot is below its cost basis. TaxHarvest can use connected brokerage data to surface lot-level basis, holding period, and unrealized result so the investor can review the shares that would actually be sold.

That matters because the tax result follows the identified lot, not the headline return. The IRS explains that a capital gain or loss is generally the difference between adjusted basis and the amount realized on a sale. Holding an investment for more than one year generally produces long-term rather than short-term treatment. See IRS Topic 409 for the federal capital-gain and loss framework.

The first question is therefore not “is this position down?” It is “which shares would be sold, what result would they create, and does that result serve a real tax or investment purpose?”

Estimate How a Loss Could Be Used

A realized capital loss first offsets capital gains under the federal netting rules. If capital losses exceed capital gains, an individual can generally use up to $3,000 of the remaining net loss against other income for the year ($1,500 for married filing separately), with unused losses carried forward. The outcome depends on the investor's own return, state treatment, carryforwards, and other transactions.

TaxHarvest can estimate the tax value of a candidate lot using connected data and the assumptions a customer provides. It can also show when a loss may be paired with a gain the investor already wants to realize. That is an estimate to review—not a tax return or a guaranteed saving.

For example, suppose a connected taxable account contains a lot with a $12,000 unrealized loss and the investor has already realized a $12,000 capital gain in the same tax year. Selling the loss lot would generally leave no net capital gain from those two items before other gains, losses, deductions, and state rules are considered. The loss is not an extra $12,000 of cash, and a replacement investment may carry a lower basis that affects a future sale.

For the broader tax-versus-investment distinction, read what tax-loss harvesting changes—and what it does not.

Check Wash-Sale Risk Before Acting

The software can flag wash-sale and rebuy risks from the accounts that are connected. The investor still needs to account for anything the software cannot see, including unconnected accounts, a spouse's transactions, planned purchases, dividend reinvestment, equity compensation, and IRA activity.

The IRS describes a wash sale in Publication 550: selling stock or securities at a loss and buying substantially identical stock or securities within 30 days before or after the sale can defer the loss. An IRA or Roth IRA purchase can be more severe; under Revenue Ruling 2008-5, it can disallow the taxable-account loss without an ordinary taxable-account basis adjustment.

TaxHarvest's wash-sale output is a general flag, not a legal conclusion about whether two securities are substantially identical. An investor should review the full household calendar and confirm the trade at the brokerage before submitting an order.

Review the Replacement and the Trade Preview

Harvesting usually means selling one security and choosing whether to hold cash, buy a different security, or wait before buying the original again. A replacement is not automatically safe or equivalent. The investor should compare its benchmark, holdings, concentration, fees, liquidity, and likely tracking behavior against the original holding.

Before acting on a TaxHarvest suggestion, review:

1. The specific lot, share count, basis, holding period, and estimated loss.
2. Current-year gains, losses, carryforwards, and relevant state-tax assumptions.
3. Recent and scheduled purchases across the household, including dividend reinvestment.
4. The replacement-security tradeoffs and trading costs.
5. The brokerage's final trade preview and tax-lot selection.

TaxHarvest does not custody assets, prepare tax returns, or replace a tax professional or investment adviser. Its output is informational and dependent on brokerage data and user-provided assumptions. The product's disclosures explain those limits in more detail.

Where the Workflow Helps Most

The workflow is most useful when the tax picture is difficult to see from one brokerage screen: multiple lots, multiple connected accounts, recurring purchases, a planned sale of an appreciated holding, or a portfolio that needs a household wash-sale review.

It is less useful when there are no meaningful gains or loss lots, a sale would disrupt the investment plan, or a replacement would be unsuitable. In those cases, “do nothing” can be the sound result.

For the operating model, continue with tax-loss-harvesting alerts and software for existing brokerage accounts. For the IRS rules that still govern the decision, use the 2026 tax-loss-harvesting rules guide.

Bottom Line

TaxHarvest can organize connected brokerage data into lot-level tax estimates and general suggestions. The investor still decides whether to trade, whether the replacement fits the portfolio, and how any transaction belongs on the tax return. Treat a potential tax benefit as one input alongside investment risk, costs, and professional advice—not as a promised outcome.