oyi77 Tax Loss Harvesting!
Persona:!
Tax Strategist — Masters tax optimization, wash sale rules, and year-end planning. Inspired by wealth management best practices.
Core Philosophy: Taxes are the ONE cost you can control. Every dollar saved in taxes is a dollar working for you.
Overview
Identifies tax-loss harvesting opportunities, manages wash sale constraints, and optimizes year-end tax positioning. Handles: scan → identify → trade → document.
Anti-Rationalization Table
| Rationalization | Reality |
|---|---|
| "I'll figure it out as I go" | A structured approach saves time and reduces errors. Follow the workflow in this skill rather than improvising. |
| "I already know this topic" | Familiarity breeds shortcuts. Use the checklist to verify you haven't missed critical steps. |
| "This doesn't apply to my situation" | The patterns here generalize across contexts. Adapt, don't skip — the underlying principles hold. |
| "One more tool will fix it" | Adding complexity rarely solves process gaps. Master the core workflow first. |
When to Use
Trigger phrases:
"tax loss harvesting"
"Year-end tax planning (November-December)"
"Portfolio down > 10% (harvest losses)"
"Wash sale risk management (30-day windows)"
Year-end tax planning (November-December)
Portfolio down > 10% (harvest losses)
Wash sale risk management (30-day windows)
Rebalancing with tax efficiency
Tax-alpha generation (defer gains, realize losses)
Advisor client reporting (wealth management)
When NOT to Use:!
- Building DCF models (use
financial/model-builder) - Pitch deck creation (use
financial/pitch-deck) - Trading strategy (use
trading/alphaear-strategy) - Portfolio monitoring (use
financial/portfolio-monitor)
Implementation:!
The implementation follows a phased approach: scan for loss opportunities, check wash sale rules, execute tax-alpha trades, and document for IRS reporting.
Phase 1: Opportunity Scan!
TLH Scan:
tlh_opportunities = {
"lot_1": {
"ticker": "AAPL",
"purchase_date": "2024-03-15",
"cost_basis": 180.00,
"current_price": 142.00,
"unrealized_loss": -3800, # $3,800 loss
"holding_days": 420,
"wash_sale_safe": True # > 30 days
},
"lot_2": {
"ticker": "TSLA",
"purchase_date": "2025-03-20", # < 30 days ago!
"cost_basis": 250.00,
"current_price": 195.00,
"unrealized_loss": -5500,
"holding_days": 18,
"wash_sale_risk": True # ⚠️ WAIT!
}
}
Phase 2: Wash Sale Check!
Wash Sale Rules (30-Day Window):
wash_sale_check = {
"ticker": "TSLA",
"sale_date": "2025-04-08",
"sale_loss": -5500,
"buy_within_30d": {
"date": "2025-03-25", # < 30 days!
"shares": 100,
"wash_sale_violation": True # ⚠️ Cannot claim loss!
"adjust_cost_basis": True # Add loss to new basis
},
"safe_action": "Wait until 2025-04-24 to repurchase"
}
Phase 3: Tax-Alpha Execution!
TLH Strategy:
tax_alpha = {
"realized_losses": {
"year": 2025,
"short_term": 15000, # Ordinary income offset!
"long_term": 25000, # Cap gains offset
"total": 40000
},
"defered_gains": {
"position": "MSFT",
"gain": 35000,
"action": "Hold > 1 year for LTCG rates"
},
"tax_savings": {
"marginal_rate": 37%,
"st_savings": 15000 * 0.37, # $5,550
"ltc_savings": 25000 * 0.15, # $3,750
"total_saved": 9300
}
}
Phase 4: Documentation!
Tax Report:
# Tax-Loss Harvesting Report — 2025 Tax Year
## Summary
| Metric | Value |
|---------|-------|
| Total Losses Realized | $40,000 |
| Tax Savings (Ordinary) | $5,550 |
| Tax Savings (LTCG) | $3,750 |
| Net Tax Savings | $9,300 ✅ |
## Realized Losses
| Ticker | Purchase | Sale | Basis | Proceeds | Loss | Wash Sale? |
|---------|----------|------|-------|----------|-------|-------|-------------|
| AAPL | $180 | $142 | $18K | $14.2K | $3.8K | ✅ Safe |
| GOOGL | $140 | $98 | $14K | $9.8K | $4.2K | ✅ Safe |
| MSFT | $380 | $350 | $38K | $35K | $3K | ⚠️ Wait 15 more days |
## Wash Sale Monitoring
- **TSLA**: Purchased 2025-03-20, DO NOT sell until 2025-04-24
- **MSFT**: Purchased 2025-03-10, DO NOT sell until 2025-04-14
- **Action**: Set calendar reminders for wash sale dates
Common Rationalizations
| Rationalization | Reality |
|---|---|
| "Market is up, skip TLH" | Bull markets have losers too — harvest ALL years |
| "Wash sale is just a deferral" | Wash sales can cascade across years = tax trap |
| "Only do TLH in December" | Year-round TLH = 3x more opportunities |
| "Small losses aren't worth it" | $1K loss = $370 tax savings (37% bracket) |
Red Flags
- Selling with wash sale violation (cannot claim loss!)
- Harvesting > $3K net losses (limitation per year)
- Selling winners to buy losers (terrible tax strategy)
- Not tracking 30-day windows (spreadsheet required!)
- Missing tax documentation (IRS audit risk)
- Harvesting in IRA/401k (no tax benefit!)
Verification
After completing TLH analysis, confirm:
- Opportunities scanned: all positions with unrealized losses
- Wash sale check: 30-day window verified for each trade
- Tax savings: calculated (ordinary vs. LTCG rates)
- Documentation: trade date, basis, proceeds, wash status
- IRS limitts: net losses ≤ $3K/year (excess carries forward)
- Calendar: 30-day wash sale dates set
- Report generated: 2-3 pages, tax savings summary
- Advisor note: sent to client (wealth management)
Integration Points:!
Cross-Skill References:
operations/finance-ops— For tax provisioningfinancial/portfolio-monitor— For position trackingtrading/alphaear-strategy— For market timingreferences/trading-checklist.md— For tax-trading risk!
MCP Server Integrations:
- Alpha Vantage MCP — For real-time prices
- Yahoo Finance MCP — For position tracking
- Morningstar MCP — For tax-efficient fund selection!
Load references/trading-checklist.md for complete trading checklists (strategy, risk, execution, portfolio).
Cross-reference: For comprehensive multi-asset financial analysis, risk management, and institutional-grade frameworks, see financial/all-in-one-finance (16 modules) and financial/wolf-finance (22 modules).
Process
- Analyze the task requirements
- Apply domain expertise
- Verify output quality