Performing a tax loss harvest | Enrich Finance Help Center

What is tax loss harvesting (TLH)?

Tax loss harvesting (TLH) is a strategy where you intentionally sell investments that are down so you can use those realized losses to reduce your taxable gains and, in some cases, a portion of your ordinary income.

You usually reinvest the sale proceeds into similar (but not “substantially identical”) investments so your overall strategy stays on track while your tax bill potentially goes down.

As you harvest losses, you’ll also want to avoid “wash sales,” which happen when you sell at a loss and quickly buy back the same (or nearly identical) investment, causing the IRS to disallow that loss in the current year.

When should I consider a TLH?

TLH is most useful in taxable brokerage accounts when:

You’ve realized (or expect to realize) capital gains this year.
Some of your holdings are trading below what you paid for them (basis).
You want to stay invested, but you’d like to improve your after-tax outcome.

In general, TLH is most powerful for investors with:

Meaningful balances in taxable accounts.
Moderate to high tax brackets.
A long-term, buy-and-hold plan where harvested losses can compound their benefit over time.

Tax rules are complex and individual, so it’s a good idea to talk with a qualified tax professional if you’re not sure how TLH applies to your situation.

How TLH works in Enrich

Enrich is designed to help you spot TLH opportunities and turn them into concrete steps you can execute at your broker, without changing your overall strategy.

At a high level, the TLH flow looks like this:

Turn on tax loss harvesting monitoring and filter by thresholds you care about
To avoid noise, you can apply sensible minimum loss thresholds (for example, only showing losses above a certain dollar or percentage amount) so you’re not chasing tiny, low-impact trades. This is under the Investment Strategy section of any goal, under the edit strategy section, there is an "Advanced Settings" area where you can toggle on/off TLH monitoring, and determine what percentage dip and dollar amount dip will cause a TLH to be triggered. For example, if a security drops by 30% but drops lower than $100, you won't get an alert.
Enrich scans for unrealized losses
Enrich looks across your connected taxable accounts for positions trading below their cost basis. These are your potential “harvest” candidates.
Match to your goal allocations
Before suggesting anything, Enrich checks each goal’s target allocation so TLH trades don’t accidentally knock you far off your plan. The idea is to capture tax value while keeping your risk profile intact.
TLH alerts
For each potential sale, Enrich DOES NOT surface replacement funds or securities. Instead, Enrich will generate a 31 day delay to purchase the same security to avoid wash sales. If you want to avoid the 31 day delay, you will need to find a funds or securities that
- Provide similar exposure (e.g., another broad-market index fund).
- Are not “substantially identical,” to help you avoid wash-sale issues.
Generate a TLH “to-do” list
Enrich provides a clear set of:
- “Sell” suggestions for loss positions, and
- “Buy” suggestions that are delayed by 31 days, with quantities or dollar amounts.
You execute the trades at your broker
Enrich never moves your money or places trades for you. You’ll review the suggestions, then manually place the sells and buys in your brokerage accounts (Fidelity, Schwab, Vanguard, etc.).
We update your dashboards once trades settle
After your accounts sync again, you’ll see the new positions and can track how they support each goal and your overall asset allocation.

Step-by-step: performing a TLH with Enrich

Screen names may vary slightly, but here’s the typical path.

Open your goal
- From your main dashboard, select the goal or specific taxable account you want to review for TLH opportunities.
Navigate to “Tax opportunities” or TLH tools
- When a TLH is available, you will get a notification on the goal that is labeled “Tax loss harvesting opportunities”
Review suggested loss candidates
- You’ll see a list of positions with unrealized losses that meet your thresholds, along with:
  - Original cost basis and current value.
  - Estimated realized loss if you sell today.
Place the trades at your broker
- Use the Enrich checklist to:
  - Enter the sell orders for the chosen loss positions.
  - Enter the buy orders for your replacements these will be at a 30 day delay from your sale.
Confirm and monitor
- After trades settle and sync, verify that:
  - Your replacement holdings appear correctly.
  - Your goal allocations still look aligned with your plan.
- At tax time, your broker’s 1099 and transaction history will reflect the realized losses.

The wash sale rule: what to watch out for

The wash sale rule is the main “gotcha” in TLH.

You generally cannot claim a loss if you sell a security at a loss and then buy the same or “substantially identical” security within 30 days before or after the sale (a 61‑day window including the sale date).
The rule applies across all your accounts, including IRAs and spouse accounts, not just the one you harvested in.
If a wash sale happens, the loss isn’t gone forever—it’s usually added to the cost basis of the new shares and the holding period carries over—but you lose the immediate tax benefit.

Enrich can help flag obvious overlaps, but it can’t see every possible conflict (like trades in accounts you haven’t connected), so it’s important to keep your own 30‑day window in mind.

Example: a simple TLH

Suppose you:

Bought 20,000 of a broad U.S. stock ETF.
It’s now worth 16,000, so you have a 4,000 unrealized loss.
You already realized 8,000 of capital gains this year from another sale.

A TLH flow might look like:

Enrich surfaces this ETF as a 4,000 loss candidate in your taxable account.
You choose to sell the ETF and buy a similar but not substantially identical ETF tracking a slightly different index.
Your portfolio stays roughly the same risk-wise, but now you’ve realized a 4,000 loss that can offset 4,000 of your 8,000 gain.

You’d only owe tax on the remaining 4,000 net gain, and if your losses exceeded your gains, you could typically apply up to 3,000 of net capital loss against ordinary income and carry the rest forward, subject to IRS rules.

FAQs

Does Enrich automatically harvest losses for me?
No. Enrich surfaces TLH opportunities and suggests trades, but you place all orders yourself at your broker. This keeps you fully in control while still reducing the grunt work.

Is TLH only for year‑end?
No. You can harvest losses any time during the year when markets dip and you see meaningful unrealized losses, as long as you respect the wash sale windows.

Will TLH always lower my taxes?
TLH is designed to improve after-tax outcomes, but the benefit depends on your tax bracket, realized gains, holding periods, and future tax rates. It shifts the timing of taxes, and in some cases may only provide modest savings.

Should I talk to a tax professional before using TLH?
If you’re dealing with large balances, complex situations, or you’re just unsure, a tax professional can help you understand how TLH fits into your broader plan.