Dynamic Tax Loss Harvesting

Capture tax-loss opportunities as they emerge. Maintain portfolio alignment. Reduce manual work. Harvest the dip.

Tax-loss harvesting is often concentrated around quarter-end or year-end reviews. But markets move every trading day. A position can decline enough to create a harvesting opportunity, then recover before the next scheduled review. By then, the opportunity to realize that loss may be gone. Advisors rarely have the time to monitor every position and tax lot across every client portfolio each day. As a result, opportunities can go unrecognized.

Bespoke’s Dynamic Tax Loss Harvesting monitors taxable holdings daily, flags potential opportunities as they arise, and gives advisors a systematic way to evaluate and act on them - without manually reviewing every position.

The opportunity doesn't wait for December

Consider a stock that declines in May and recovers by year-end. A review in December may find no loss to harvest: the dip has already recovered. Harvest during the May decline, and the loss can be realized while a suitable replacement holding helps maintain market exposure through the recovery. The dip was recovered. The harvested loss was captured.

By monitoring portfolios every trading day, Bespoke helps advisors identify opportunities that less frequent reviews miss.

How it works with Bespoke

Dynamic Tax Loss Harvesting brings tax awareness into the daily portfolio-management workflow rather than treating it as a separate, scheduled exercise.

• Capture more opportunities. Identify potential losses as market movements create them, rather than waiting for month-end, quarter-end, or year-end.
• Maintain portfolio alignment. Suggest replacement holdings that preserve appropriate exposure and remain consistent with firm models and configurations.
• Understand the potential tax benefit. See proposed losses and estimated tax savings, evaluated against available realized gains and applicable estimated rates.
• Reduce manual work. Automate daily monitoring and assemble proposed sales, replacement holdings, and relevant checks into a workflow the advisor can review.
• Keep the advisor in control. Every harvest remains subject to advisor approval. When there is nothing actionable, there is no unnecessary advisor task.

Tax alpha?

Markets rise and fall. Individual stocks move by different amounts and at different times, creating opportunities to realize losses even when broader markets are rising. Systematic tax-loss harvesting seeks to turn that volatility and dispersion into potential value for clients. Realized losses may offset capital gains, potentially improving after-tax returns without requiring an advisor to change the portfolio’s broader investment strategy. Returns vary. The opportunity for tax alpha comes from identifying and acting on harvestable losses as they emerge. Daily monitoring helps capture opportunities that might otherwise be missed.

When it makes sense

Tax-loss harvesting is generally most relevant for clients with taxable accounts, realized capital gains to offset, and tax circumstances in which realizing losses may provide a benefit. It generally does not provide the same benefit in tax-deferred accounts, such as IRAs and 401(k)s.

Harvesting typically defers taxes rather than eliminating them. Selling a position at a loss and purchasing a replacement may result in a lower cost basis and potentially larger taxable gains in the future. Wash-sale rules, transaction costs, portfolio objectives, and the client’s broader tax situation also matter.

The objective is not to harvest every loss. It is to identify opportunities where the potential tax benefit makes sense in the context of the client’s portfolio and circumstances.

Tax management, built into the workflow

Effective tax-loss harvesting requires more than identifying a position trading below its cost basis. Advisors must monitor portfolios, evaluate tax lots, assess potential benefits, select suitable replacements, and consider wash-sale conflicts across relevant accounts.

Bespoke makes that process systematic. Opportunities are identified daily, evaluated within the firm’s investment framework, and presented to advisors with the context needed to decide whether to act.

Dynamic Tax Loss Harvesting helps advisors bring ongoing tax awareness into portfolio management—capturing potential value for clients without adding another manual process.