As the old adage directs, when you are dealt lemons, make lemonade.  It’s time to be opportunistic.

We all know it has been a volatile year in the markets.  As 2022 draws to a close, we are in the process of utilizing any losses our clients may have experienced in taxable accounts to trim positions which have out-performed.

Here’s what you need to know:

• The process we employ is an IRS approved strategy, known as Tax Loss Harvesting.  We will realize losses in taxable accounts to offset gains.
• The objective is to re-position accounts without significant unwanted tax liability.
• Tax loss harvesting allows us to maintain an allocation appropriate for each client’s objectives, risk tolerance and time horizon.
• The proceeds of any sale will either be reinvested in a new position, with similar aims, or redirected to an existing position.  As always, we will be guided by each client’s Investment Policy Statement (IPS).
• The Wash Sale Rule prohibits us from buying back the same security for at least 30 days.
• The Wash Sale Rule also mandates that the two investments—the one sold and the one purchased—be distinct.

The IRS can negate the tax loss for failure to follow the rule.

Many of our clients will see increased trading activity on their December statements.  The trades will include both sales and purchases.

Tax loss harvesting is a thoughtful way to take advantage of an unwanted investment result, turning a negative into a positive.  In other words, making lemonade.

If you have any questions, we will welcome your call.

Todd