Start With Tax Strategy
Define:
Tax objectives
Gain offset goals
Long-term tax management approach
before harvesting.
Group Accounts Carefully
Avoid grouping unrelated accounts.
Over-grouping can reduce harvesting opportunities.
Match Rules to Custodian Type
VSP
Use lot-level rules.
Non-VSP
Use position-level rules.
Use Meaningful Thresholds
Avoid:
Over-trading
Harvesting immaterial losses
Choose Replacement Securities Carefully
Replacements should:
Maintain market exposure
Avoid wash sale conflicts
Align with portfolio strategy
Avoid Over-Harvesting
Prioritize meaningful losses rather than harvesting for activity alone.
Treat TLH as an Ongoing Process
Regularly review:
Rules
Account Groups
Exclusions
Portfolio alignment