Sell Based on Tax Optimization Setting

This feature allows you to determine if you want to sell securities in a way that produces lower tax costs to the client.

This setting only applies to groups for rebalancing and does not apply to single accounts.

Choose one of the following options:

Setting	More Information
Yes	Tamarac Trading will temporarily ignore model ranks and rebalance to your model targets at the lowest possible tax cost to the client. Securities will be sold in the following order: Securities with losses Securities with no tax consequences Securities with gains
No	Tamarac Trading will use ranks and sell the lowest ranked securities first until it reaches the target for the model.

Setting

More Information

Yes

Tamarac Trading will temporarily ignore model ranks and rebalance to your model targets at the lowest possible tax cost to the client. Securities will be sold in the following order:

Securities with losses
Securities with no tax consequences
Securities with gains

Tamarac Trading will use ranks and sell the lowest ranked securities first until it reaches the target for the model.

Example

You are about to perform a tax loss harvesting rebalance on a client's account. That client currently has these holdings in her account:

In the example above, with the Sell Based on Tax Optimization option set to Yes, Tamarac Trading will sell AAPL because it has the greatest loss.

For more information on this and other available tax loss harvesting features in Tamarac Trading, see Tax Loss Harvesting and Tax Management Strategies.