Overview
The SMArtX Tax Loss Harvester (TLH) helps advisors identify and execute tax-loss harvesting opportunities by realizing short- and long-term capital losses that may be used to offset capital gains or ordinary income. The tool monitors for wash sales across related accounts and provides controls for replacement securities and post–wash sale realignment.
TLH is designed to support both model-managed and advisor-managed portfolios and adapts to custodian-specific trading capabilities.
Accessing the Tax Loss Harvester Tool (TLH)
To access the Tax Loss Harvesting tool:
Navigate to Tax Harvesting from the left-hand navigation menu.
The main TLH interface will open, displaying Account Groups and Harvest Rules.
Advisors may switch between the new and classic TLH interfaces as needed using the Switch to Classic Tax Loss Harvester option.
TLH Core Concepts
Account Groups
Account Groups represent tax households. They allow SMArtX to monitor wash sales across multiple related accounts and apply a unified tax strategy.
Key rules:
An Account Group may contain one or more accounts.
An account can belong to only one Account Group at a time.
All accounts in an Account Group share the same tax goals and wash sale monitoring.
Each Account Group is assigned:
A group name
Filing status
Tax year end
Short- and long-term tax goals
A tax rate
An assigned Harvest Rule
Harvest Rules
Harvest Rules define the criteria used to identify tax-loss harvesting opportunities.
Rules can be configured using:
Dollar-based thresholds
Percentage-based thresholds
Long-term and short-term gain/loss criteria
Rules may be applied to:
Positions – evaluates the net position and returns all associated lots
Lots – evaluates individual tax lots
Both – evaluates at both the position and lot level
Once created, a Harvest Rule can be applied to one or more Account Groups.
Versus Specific Purchase (VSP)
Versus Specific Purchase (VSP) refers to a custodian’s ability to execute trades against specific tax lots, regardless of the account’s default tax lot relief method.
VSP custodians allow advisors to select exact lots to harvest.
Non-VSP custodians execute trades based on the custodian’s default relief method (e.g., FIFO).
Custodian VSP support determines whether advisors should use lot-level or position-level Harvest Rules and affects how realized gains and losses are calculated.
Creating a Harvest Rule
To create a Harvest Rule:
From the main Tax Harvesting page, select Harvest Rules.
Click Create New Rule.
Enter a rule name.
Define minimum dollar or percentage gain/loss thresholds.
Select whether the rule applies to positions, lots, or both.
Save the rule.
Once saved, the rule can be assigned to one or more Account Groups.
Creating an Account Group
To create an Account Group:
Click Create New Account Group from the main Tax Harvesting page.
Enter the group name.
Select filing status and tax year end.
Define short- and long-term tax goals.
Enter the applicable tax rate.
Assign a Harvest Rule.
Add eligible accounts to the group.
Save the Account Group.
After creation, SMArtX begins monitoring the group for harvesting opportunities and wash sale activity.
Viewing Harvest Opportunities
When a Harvest Rule is applied to an Account Group, eligible opportunities appear in the Opportunities column on the Account Groups view.
Opportunities are displayed by symbol.
Each symbol can be expanded to show account- and lot-level detail.
Opportunities can be sorted by ticker, short-term gain, or long-term gain.
Selecting an opportunity opens the Harvesting Opportunities view.
Harvesting Opportunities
VSP Custodians
For custodians that support VSP:
Advisors may select specific tax lots.
Full or partial lots may be harvested.
Multiple accounts and symbols may be harvested in a single event.
Non-VSP Custodians
For custodians that do not support VSP:
Harvesting is performed at the position level.
Advisors enter a quantity of shares to sell.
SMArtX displays which lots will be sold based on the custodian’s tax lot relief method.
After selections are made, click Next to proceed.
Replacement Instructions
For each harvested symbol, advisors must choose a replacement instruction:
Hold cash, or
Purchase a replacement security
Replacement instructions are applied on a symbol-by-symbol basis.
SMArtX applies an exclusion to prevent repurchase of the harvested security for 31 days, helping to avoid wash sales.
Reopen After the Wash Sale Period
Advisors may select Reopen After Wash Sale Period when submitting a harvest request.
If selected, exclusions automatically expire 31 days after the harvest.
If not selected, exclusions remain in place until manually removed.
Behavior after reopening:
Model-managed positions automatically realign with the model.
Advisor-managed positions require manual rebalancing by submitting the account through the rebalancer.
Submitting and Reviewing Harvest Requests
After reviewing all selections:
Confirm replacement instructions and reopen preferences.
Submit the harvest request.
To review harvest activity:
Navigate to View Harvest Requests from the main TLH page.
Review current and historical requests, including:
Harvested symbols
Replacement instructions
Estimated tax impact
Wash sale status and expiration
Advisors should periodically review this page to ensure exclusions are removed as intended and portfolios remain aligned.
Summary
The Tax Loss Harvesting tool provides a structured, custodian-aware approach to identifying and executing tax-loss harvesting opportunities. Proper setup of Account Groups and Harvest Rules, combined with thoughtful replacement and review practices, enables advisors to integrate tax efficiency into ongoing portfolio management.