tax-loss-harvesting

name	tax-loss-harvesting
description	Use this skill when the task requires tax loss harvesting capabilities.
executor	LLM_BEHAVIOR
skill_id	finance.wealth_management.tax_loss_harvesting_3
status	ADOPTED
security	{"level":"high","pii":false,"approval_required":true}
anchors	["finance"]
tier	2
input_schema	[{"name":"code_or_task","type":"string","description":"Code snippet, script, or task description to process","required":true}]
output_schema	[{"name":"result","type":"object","description":"Result from the automated action"},{"name":"status","type":"string","description":"Execution status: success | partial | failure"}]

Tax-Loss Harvesting

description: Identify tax-loss harvesting opportunities across taxable accounts. Finds positions with unrealized losses, suggests replacement securities, and tracks wash sale windows. Triggers on "tax-loss harvesting", "TLH", "harvest losses", "tax losses", "unrealized losses", or "year-end tax planning".

Workflow

Step 1: Identify Candidates

Scan taxable accounts for positions with unrealized losses:

Security	Asset Class	Cost Basis	Current Value	Unrealized Loss	Holding Period	% Loss
					ST / LT

Prioritize by:

1. Largest absolute loss (biggest tax benefit)
2. Short-term losses first (offset short-term gains taxed at ordinary income rates)
3. Positions with the largest % loss (less likely to recover quickly)

Step 2: Gain/Loss Budget

Calculate the client's tax situation:

Category	Amount
Realized short-term gains YTD
Realized long-term gains YTD
Realized losses YTD
Net gain/(loss) position
Carryforward losses from prior years
Target harvesting amount

Tax savings estimate:

• Short-term losses × marginal ordinary income rate
• Long-term losses × capital gains rate
• Up to $3,000 net loss deduction against ordinary income
• Excess carries forward

Step 3: Replacement Securities

For each harvest candidate, suggest a replacement that:

• Maintains similar market exposure (same asset class, sector, geography)
• Is NOT "substantially identical" (wash sale rule)
• Has similar risk/return characteristics

Sell	Replace With	Reason	Tracking Error Risk
SPDR S&P 500 (SPY)	iShares Core S&P 500 (IVV)	Same index, different fund family	Minimal