What is a Harvest Rule?
Harvest Rules define the criteria used to identify harvesting opportunities.
Rules can evaluate:
Dollar gains/losses
Percentage gains/losses
Long-term vs short-term positions
Rule Types
Position-Level RulesEvaluates the entire position. Best used for:
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Lot-Level RulesEvaluates individual tax lots. Use lot-based rules when the loss or gain of specific tax lots should be used to determine if a position meets the rule criteria. |
BothEvaluates positions and individual tax lots
Selecting both does no harm: accounts at custodians that allow lot-level orders via FIX present lots for selection, and accounts at custodians that do not allow lot-level orders via FIX present the total harvest quantity. |
Best Practices
Dollar-Based Rules | Best for:
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Percentage-Based Rules | Best for:
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Important Consideration | Position-level and lot-level rule logic will impact which rule type best executes your tax strategy. |