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How do harvested losses on my existing Wealthfront account affect the way you manage my taxable account transfer?

We use short-term capital losses from Daily Tax-Loss Harvesting and Direct Indexing to offset short-term capital gains and accelerate your transition into the Wealthfront portfolio. Newly transferred securities with a short-term gain will be sold to the extent we have harvested losses in your account to offset those gains. For example, if Wealthfront has harvested $1,000 in losses in your account, and you transfer a single security with a short-term gain of $2,000, we will sell shares of the transferred security up to the point you recognize $1,000 in short-term gains. We will then continue to sell the transferred security as we harvest new losses in your account or if the short-term gain becomes long-term. This means your dashboard may show harvested losses before the transfer, but no net losses at year end because we have used them to transition your transferred assets into a diversified Wealthfront portfolio.

 

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Nothing in this blog should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Wealthfront Inc. clients pursuant to a written agreement, which investors are urged to read carefully, that is available at www.wealthfront.com. All securities involve risk and may result in some loss. For more information please visit www.wealthfront.com or see our Full Disclosure. While the data Wealthfront uses from third parties is believed to be reliable, Wealthfront does not guarantee the accuracy of the information.