Tax Loss Harvesting: Complete 2024 Strategy Guide to Offset Gains

Tax loss harvesting is one of the most powerful yet underutilized strategies for reducing your investment tax bill. By strategically selling investments at a loss to offset capital gains, you can potentially save thousands of dollars in taxes while maintaining your desired portfolio allocation.

The beauty of tax loss harvesting is that it works within the existing tax code to lower your current and future tax liability without requiring you to change your overall investment strategy. Whether you're a passive index fund investor or an active trader, understanding and implementing tax loss harvesting can significantly improve your after-tax returns.

In this comprehensive guide, we'll explore how tax loss harvesting works, the critical wash sale rule you must follow, special cryptocurrency tax loopholes, automated tools that make the process effortless, and optimal timing strategies to maximize your tax savings in 2024 and beyond.

Table of Contents

1. What is Tax Loss Harvesting?
2. How Tax Loss Harvesting Works
3. The Wash Sale Rule Explained
4. Capital Loss Deduction Limits
5. Tax Loss Harvesting Strategies
6. Cryptocurrency Tax Loss Harvesting
7. Timing Your Tax Loss Harvesting
8. Automated Tax Loss Harvesting Tools
9. Common Mistakes to Avoid
10. Advanced Optimization Techniques

What is Tax Loss Harvesting?

Tax loss harvesting is the practice of selling investments that have declined in value to realize capital losses, which can then be used to offset capital gains from other investments. This strategy reduces your taxable income and, consequently, your tax bill.

The Basic Concept

When you sell an investment for more than you paid (your cost basis), you have a capital gain that's subject to tax. When you sell for less than you paid, you have a capital loss that can offset those gains.

Example:

• You sell Stock A for a $10,000 gain
• Without tax loss harvesting: Pay $1,500 in capital gains tax (15% rate)
• You sell Stock B at a $10,000 loss to offset the gain
• With tax loss harvesting: Pay $0 in capital gains tax
• Tax savings: $1,500

Why Tax Loss Harvesting Matters

Over a lifetime of investing, tax loss harvesting can add 0.5% to 1.5% annually to your after-tax returns, according to research from Vanguard and other financial institutions. On a $1 million portfolio, that's $5,000 to $15,000 per year in additional value.

The compounding effect is even more powerful. That extra 1% annual return compounds over decades, potentially adding hundreds of thousands of dollars to your retirement savings.

How Tax Loss Harvesting Works

The mechanics of tax loss harvesting involve four key steps:

Step 1: Identify Positions with Losses

Review your portfolio to find investments trading below your purchase price (cost basis).

Example portfolio on December 1, 2024:

| Investment | Cost Basis | Current Value | Unrealized Gain/Loss | |-----------|-----------|---------------|---------------------| | VOO (S&P 500 ETF) | $50,000 | $58,000 | +$8,000 (gain) | | VTI (Total Market ETF) | $30,000 | $26,000 | -$4,000 (loss) | | VXUS (International ETF) | $20,000 | $17,500 | -$2,500 (loss) |

Step 2: Sell the Losing Positions

Sell the investments with unrealized losses to "realize" the loss for tax purposes.

In our example: Sell VTI and VXUS

• Realized losses: $4,000 + $2,500 = $6,500

Step 3: Use Losses to Offset Gains

Apply your realized losses against realized capital gains.

In our example: Sell VOO to realize the $8,000 gain

• Capital gains: $8,000
• Capital losses: $6,500
• Net taxable gain: $1,500

Tax benefit:

• Without harvesting: $8,000 × 15% = $1,200 tax
• With harvesting: $1,500 × 15% = $225 tax
• Savings: $975

Step 4: Replace the Investment (Optional)

To maintain your market exposure, replace the sold investments with similar (but not substantially identical) securities.

In our example:

• Sold VTI (Total Market ETF) → Buy ITOT (iShares Total Market ETF)
• Sold VXUS (International ETF) → Buy IXUS (iShares International ETF)

Your portfolio allocation remains essentially the same, but you've locked in tax losses.

2024 Capital Gains Tax Rates

Understanding your capital gains tax rates helps you calculate tax loss harvesting benefits.

Long-term capital gains (investments held > 1 year):

| Filing Status | 0% Rate | 15% Rate | 20% Rate | |--------------|---------|----------|----------| | Single | $0 - $47,025 | $47,026 - $518,900 | Over $518,900 | | Married filing jointly | $0 - $94,050 | $94,051 - $583,750 | Over $583,750 | | Head of household | $0 - $63,000 | $63,001 - $551,350 | Over $551,350 | | Married filing separately | $0 - $47,025 | $47,026 - $291,850 | Over $291,850 |

Short-term capital gains (held ≤ 1 year): Taxed as ordinary income at your marginal rate (10%-37%)

The Wash Sale Rule Explained

The wash sale rule is the most important constraint on tax loss harvesting. It prevents you from claiming a tax deduction if you buy a "substantially identical" security within 30 days before or after the sale.

The 30-Day Rule

You cannot claim a loss if you:

• Buy the same or substantially identical security 30 days before the sale
• Buy the same or substantially identical security 30 days after the sale

This creates a 61-day window (30 days before + sale day + 30 days after) where you must avoid repurchasing.

What Counts as "Substantially Identical"?

The IRS hasn't provided a precise definition, but general guidelines:

Substantially identical (wash sale triggered):

• Same stock (sell Apple, buy Apple)
• Same company, different share class (sell GOOGL, buy GOOG)
• Options to buy the same stock
• Short sale of the same stock

NOT substantially identical (wash sale avoided):

• Different companies in same sector (sell Exxon, buy Chevron)
• Different ETFs tracking same index (sell VOO, buy IVV or SPLG)
• Bonds from different issuers
• Different cryptocurrencies (sell Bitcoin, buy Ethereum)

ETF Replacement Strategies

Many similar ETFs track the same or similar indexes, allowing you to maintain exposure while avoiding wash sales.

Popular ETF swaps:

| Sold ETF | Replacement ETF | Index Tracked | |----------|----------------|---------------| | VOO (Vanguard) | IVV or SPLG (iShares) | S&P 500 | | VTI (Vanguard) | ITOT (iShares) | Total US Market | | VEA (Vanguard) | IEFA (iShares) | Developed Markets | | VWO (Vanguard) | IEMG (iShares) | Emerging Markets | | BND (Vanguard) | AGG (iShares) | Total Bond Market |

Wash Sale Consequences

If you trigger a wash sale:

1. The loss is disallowed for the current tax year
2. The loss is added to the cost basis of the replacement security
3. The holding period is adjusted to include the original purchase date

Example:

• January 15: Buy 100 shares of Apple at $150 = $15,000
• February 1: Sell 100 shares of Apple at $130 = $13,000 (loss of $2,000)
• February 15: Buy 100 shares of Apple at $135 = $13,500

Wash sale triggered (repurchased within 30 days)

Tax consequence:

• Cannot deduct $2,000 loss this year
• New cost basis: $13,500 + $2,000 = $15,500
• New holding period starts: January 15 (original date)

The loss isn't permanently lost—it's deferred until you sell the replacement shares without triggering another wash sale.

IRS Enforcement

The IRS receives Form 1099-B from brokers that identify wash sales within the same brokerage account. However:

• Wash sales across different brokers aren't automatically reported
• Wash sales in IRA/401(k) accounts aren't tracked but still apply
• You're responsible for tracking and reporting all wash sales

Failing to properly account for wash sales can result in audits, penalties, and interest.

Capital Loss Deduction Limits

While tax loss harvesting is powerful, the IRS limits how much you can deduct each year.

Loss Deduction Hierarchy

1. Offset capital gains (unlimited)

Use losses to offset gains dollar-for-dollar with no limit.

Example: $50,000 in losses can offset $50,000 in gains = $0 net capital gain

2. Deduct against ordinary income (limited)

If losses exceed gains, you can deduct:

• $3,000 per year ($1,500 if married filing separately) against ordinary income
• This reduces your taxable income from wages, business income, etc.

Example:

• Capital losses: $20,000
• Capital gains: $10,000
• Net loss: $10,000
• Offset against ordinary income: $3,000
• Tax savings at 24% bracket: $3,000 × 24% = $720

3. Carry forward indefinitely

Unused losses carry forward to future tax years with no expiration.

Continuing the example:

• Remaining loss: $10,000 - $3,000 = $7,000
• Year 2: Deduct another $3,000 (saves $720)
• Year 3: Deduct remaining $4,000 (saves $960 if against gains at 15%)

Short-Term vs. Long-Term Netting

Capital gains and losses are categorized by holding period:

• Short-term: Held 1 year or less
• Long-term: Held more than 1 year

Losses offset gains in this order:

1. Short-term losses offset short-term gains
2. Long-term losses offset long-term gains
3. Net short-term and net long-term offset each other
4. Remaining net loss offsets ordinary income ($3,000 max)
5. Excess carries forward

Complex example:

• Short-term gains: $15,000
• Short-term losses: $8,000
• Long-term gains: $20,000
• Long-term losses: $25,000

Netting:

• Net short-term: $15,000 - $8,000 = $7,000 gain
• Net long-term: $20,000 - $25,000 = $5,000 loss
• Final netting: $7,000 - $5,000 = $2,000 short-term gain

Tax: $2,000 × 24% = $480 (assuming 24% ordinary income bracket)

Tax Loss Harvesting Strategies

Effective tax loss harvesting requires strategic planning beyond simply selling losers.

Strategy 1: Harvest Losses, Not Winners

A common beginner mistake is selling both winners and losers together. Instead:

DO: Sell only losses to bank them DON'T: Sell winners and losers simultaneously (wastes the opportunity)

Example:

• Investment A: $10,000 gain (don't sell yet)
• Investment B: $8,000 loss (sell to harvest loss)
• Result: $8,000 loss to use now or carry forward

Later, when you want to realize gains, you'll have the harvested loss ready to offset them.

Strategy 2: Match Short-Term Losses to Short-Term Gains

Short-term gains are taxed at higher rates (up to 37%) than long-term gains (up to 20%). Prioritize using short-term losses against short-term gains for maximum tax savings.

Example:

• Short-term gain: $10,000 (37% bracket)
• Long-term gain: $10,000 (20% rate)
• Available: $10,000 short-term loss

Optimal: Offset short-term gain

• Tax savings: $10,000 × 37% = $3,700

Suboptimal: Offset long-term gain

• Tax savings: $10,000 × 20% = $2,000

Difference: $1,700 in additional savings

Strategy 3: Specific Lot Identification

If you bought the same security at different times/prices, you can choose which "lot" to sell for optimal tax outcomes.

Example: You own 300 shares of Tesla bought at different times:

• Lot 1: 100 shares at $250 (now worth $200) = $5,000 loss
• Lot 2: 100 shares at $220 (now worth $200) = $2,000 loss
• Lot 3: 100 shares at $190 (now worth $200) = $1,000 gain

To harvest the maximum loss, specifically identify and sell Lot 1.

How to use specific lot ID:

1. Tell your broker which lot you're selling when placing the order
2. Keep confirmation of your instruction
3. IRS defaults to FIFO (first-in, first-out) if you don't specify

Strategy 4: Direct Indexing for Granular Harvesting

Instead of owning an S&P 500 ETF, own the 500 individual stocks. This allows you to:

• Harvest losses on individual stocks while others gain
• Maintain market exposure
• Increase harvesting opportunities significantly

Example with S&P 500:

• ETF approach: S&P 500 is up 10% → No harvesting opportunity
• Direct indexing: 350 stocks up, 150 stocks down → Harvest losses on the 150, keep the 350

Minimum required: Typically $100,000+ to effectively diversify across hundreds of stocks

Strategy 5: Tax Loss Harvesting in Down Markets

Market corrections and bear markets create the best harvesting opportunities.

2022 example (market down ~20%):

• Many portfolios had significant losses across all holdings
• Investors could harvest massive losses for future use
• Those losses can offset gains for years or decades

Even if you have no gains this year, harvest losses to:

• Deduct $3,000 against ordinary income now
• Carry forward the rest for future gains
• Build a "loss bank" for tax flexibility

Cryptocurrency Tax Loss Harvesting

Cryptocurrency offers unique tax loss harvesting advantages because the wash sale rule does not currently apply to crypto.

The Crypto Loophole

For stocks: Wash sale rule prevents buying back within 30 days For crypto: No wash sale rule—you can sell and immediately buy back

This means you can:

1. Sell Bitcoin at a loss
2. Immediately buy Bitcoin back (same day)
3. Claim the full loss on your taxes
4. Maintain your crypto position and future upside

Why This Loophole Exists

The wash sale rule (IRC Section 1091) specifically applies to "stocks or securities." The IRS treats cryptocurrency as property, not securities, so the wash sale rule doesn't apply.

Warning: Proposed legislation could extend the wash sale rule to cryptocurrency. This loophole may close in future tax years, so use it while it's available.

Crypto Tax Loss Harvesting Example

November 2024 portfolio:

| Crypto | Cost Basis | Current Value | Unrealized Loss | |--------|-----------|---------------|----------------| | Bitcoin | $65,000 | $45,000 | -$20,000 | | Ethereum | $4,000 | $2,800 | -$1,200 | | Solana | $180 | $140 | -$40 |

Strategy:

1. December 15: Sell all three cryptocurrencies
2. December 15 (same day): Buy back all three
3. Tax benefit: Realize $21,240 in losses
4. Portfolio: Identical crypto holdings

If you also have:

• Stock gains: $30,000
• After harvesting: Taxable gains = $30,000 - $21,240 = $8,760
• Tax savings: $21,240 × 15% = $3,186

Optimal Crypto Harvesting Frequency

Unlike stocks (limited by wash sale rule), you can harvest crypto losses throughout the year, not just in December.

Monthly harvesting:

• Monitor portfolio monthly
• Harvest losses whenever they appear
• Immediately repurchase to maintain exposure
• Accumulate losses year-round

Why this helps:

• Crypto is volatile; a loss today might become a gain tomorrow
• Harvest early and often to lock in losses before prices recover
• Build a larger loss bank for flexibility

Multi-Asset Crypto Strategy

Use crypto losses to offset gains from:

• Stock sales
• Real estate sales
• Business asset sales
• Other capital gains

Example:

• Sold rental property: $50,000 gain
• No stock losses available
• Harvest $50,000 in crypto losses
• Result: $0 tax on property sale

Timing Your Tax Loss Harvesting

When you harvest losses significantly impacts your tax benefit.

Year-End Harvesting (Most Common)

December strategy:

• Review portfolio for unrealized losses
• Estimate total capital gains for the year
• Harvest enough losses to offset gains + $3,000 ordinary income deduction
• Execute sales by December 31

Advantages:

• Know your exact capital gains for the year
• Can precisely calculate needed harvesting
• Simplifies record-keeping (one event per year)

Disadvantages:

• May miss loss opportunities if prices recover before December
• Short window to execute
• Year-end trading can have slightly higher spreads

Year-Round Opportunistic Harvesting

Continuous monitoring approach:

• Set alerts for positions down 5-10%
• Harvest immediately when losses appear
• Don't wait until December

Advantages:

• Capture losses before positions recover
• Build larger loss bank over time
• Reduce year-end stress

Disadvantages:

• More transactions to track
• Need discipline and systems
• Can trigger more wash sales if not careful

Tax Loss Harvesting Calendar

Optimal timing throughout the year:

January-February:

• Review prior year tax return
• Calculate loss carryforwards
• Plan harvesting strategy for current year

March-June:

• Monitor positions quarterly
• Harvest significant losses (>$1,000)
• Especially important for crypto (no wash sale constraints)

July-September:

• Mid-year portfolio review
• Estimate total gains year-to-date
• Project needed harvesting for year

October-November:

• Calculate realized gains through October
• Identify positions to harvest in December
• Avoid triggering wash sales in early December

December:

• Execute final harvesting by December 31
• Avoid wash sales in January
• Document all transactions for tax filing

Important Cutoff Dates

December 31: Last day to realize losses for current tax year

• Must settle by year-end (consider settlement times)

T+2 settlement: Stock trades settle two business days after trade date

• Last trade date for 2024: December 27 (to settle by December 31)

T+1 settlement: Some securities settle in one day

• Check your broker's settlement schedule

Cryptocurrency: Usually settles immediately

• Can trade through December 31

Automated Tax Loss Harvesting Tools

Technology has made tax loss harvesting accessible to all investors through automated platforms.

Robo-Advisors with TLH

Betterment:

• Automatic daily tax loss harvesting
• Minimum: $0
• Harvests losses on individual ETF positions
• Swaps to similar ETFs to avoid wash sales
• Free feature with all accounts

Wealthfront:

• Daily automated tax loss harvesting
• Minimum: $500
• Harvests losses down to the individual lot level
• Direct indexing for accounts $100,000+
• Estimates annual tax savings in dashboard

Schwab Intelligent Portfolios:

• Tax loss harvesting on accounts $50,000+
• No advisory fees (makes money on cash allocation)
• Less aggressive than Betterment/Wealthfront

How Automated TLH Works

1. Daily monitoring: Scans all holdings for loss opportunities
2. Loss threshold: Typically harvests losses of $100+ per position
3. Automatic sale: Sells losing position
4. Automatic replacement: Immediately buys similar security to maintain exposure
5. Wash sale prevention: Ensures replacement isn't substantially identical
6. Tax reporting: Generates all necessary forms

Estimated Value of Automated TLH

Industry estimates:

• 0.77% annual benefit (Wealthfront)
• 0.40-1.00% annual benefit (Vanguard)

$100,000 portfolio:

• Conservative estimate: $400/year in tax savings
• Aggressive estimate: $1,000/year in tax savings
• Over 30 years at 0.77% benefit: $25,000+ in additional after-tax value

Crypto Tax Software with TLH Features

CoinTracker:

• Identifies harvesting opportunities
• Tracks wash sales (if you choose to apply them)
• Calculates optimal lots to sell
• Generates tax forms

Koinly:

• Loss harvesting reports
• Capital gains projections
• Multi-exchange support
• DeFi transaction tracking

Chedr:

• AI-powered crypto tax optimization
• Real-time harvesting alerts
• Automatic tracking across 300+ exchanges
• Integrated tax filing

Self-Directed TLH Tools

If you manage your own portfolio:

Personal Capital (free):

• Investment checkup shows unrealized gains/losses
• Identifies harvesting opportunities
• Doesn't execute trades (you do manually)

Spreadsheet approach:

• Download cost basis report from broker
• Calculate unrealized losses
• Identify similar securities for swaps
• Manually execute trades

Common Mistakes to Avoid

Even experienced investors make tax loss harvesting errors.

Mistake 1: Triggering Wash Sales Accidentally

Scenario: Sell a stock for a loss, forget about it, and buy it back 25 days later.

Solution:

• Set calendar reminders for 31 days after loss sales
• Use different brokers carefully (still subject to wash sale)
• Avoid automatic dividend reinvestment in sold positions

Mistake 2: Harvesting Losses in Tax-Advantaged Accounts

Problem: Losses in IRAs and 401(k)s provide zero tax benefit.

Why: Tax-advantaged accounts don't generate taxable events.

Solution: Only harvest losses in taxable brokerage accounts.

Mistake 3: Selling Long-Term Positions to Harvest Short-Term Losses

Problem: Giving up long-term capital gains treatment for minimal tax savings.

Example:

• Own stock 11 months (almost long-term)
• Down $1,000
• Sell to harvest loss
• Buy back similar stock
• Restart holding period

Better: Wait one more month for long-term status, then evaluate.

Mistake 4: Ignoring Transaction Costs

Problem: Trading fees can exceed tax benefits on small harvests.

Example:

• Harvest $200 loss
• Tax savings: $200 × 15% = $30
• Trading fees: $10 sell + $10 buy = $20
• Net benefit: Only $10

Solution: Set minimum loss thresholds ($500+) unless you have commission-free trading.

Mistake 5: Not Replacing Sold Positions

Problem: Selling losing positions and sitting in cash, missing market recovery.

Example:

• Sell S&P 500 ETF at a loss
• Market rallies 10% over next month
• You're in cash, miss the gain

Solution: Immediately replace with similar (not identical) security to maintain exposure.

Mistake 6: Focusing Only on Federal Taxes

Consideration: State capital gains taxes can add 5-13% in high-tax states.

California example:

• Federal long-term rate: 15%
• California rate: 9.3%
• Total: 24.3%

Tax loss harvesting is even more valuable in high-tax states.

Advanced Optimization Techniques

Sophisticated investors can employ additional strategies to maximize benefits.

Technique 1: Loss Layering

Build a "loss bank" during market downturns to offset gains for years.

Strategy:

• During bear markets, harvest all available losses
• Even if you have no gains this year
• Carry forward for future years

2022 bear market example:

• Harvested $100,000 in losses
• 2022 gains: $0
• 2022 deduction: $3,000 against ordinary income
• Remaining: $97,000 carried forward
• 2023-2024: Offset all gains tax-free using carried losses

Technique 2: Gift Appreciated Securities, Harvest Losses

Strategy:

1. Identify winners (appreciated securities) and losers
2. Gift winners to charity or family members
3. Harvest losers for tax benefit

Example:

• Stock A: $50,000 gain (donate to charity)
• Stock B: $50,000 loss (sell to harvest)
• Result: $50,000 charitable deduction + $50,000 loss = double benefit

Technique 3: Asset Location Optimization

Concept: Place tax-inefficient assets in tax-advantaged accounts, efficient assets in taxable accounts.

In taxable account (for tax loss harvesting):

• Individual stocks
• Stock ETFs
• Cryptocurrencies

In IRA/401(k) (can't harvest losses anyway):

• Bonds (generate ordinary income)
• REITs (generate ordinary income)
• High-turnover actively managed funds

Technique 4: Pair Trading for Continuous Harvesting

Advanced stock strategy:

1. Own both VOO and IVV (both track S&P 500)
2. When one drops, sell for loss and hold the other
3. Wait 31 days, swap back if desired
4. Creates continuous harvesting opportunities

Example:

• January: VOO down 5%, sell and buy IVV
• March: IVV down 3%, sell and buy VOO
• Harvested losses twice while maintaining S&P 500 exposure

Technique 5: Options Strategies

Warning: This is complex and risky. Consult a tax professional.

Protective put approach:

1. Own a stock with large unrealized gain
2. Buy put options to protect downside
3. If stock drops, put increases in value
4. Sell put for gain, potentially offset by harvesting other losses

This maintains upside exposure while creating tax management flexibility.

Conclusion

Tax loss harvesting is a proven strategy to reduce your investment tax bill, potentially adding 0.5-1.5% to your annual after-tax returns. By strategically realizing losses to offset gains, you can keep more of your investment returns working for you.

Key takeaways:

1. Harvest losses to offset gains: Use capital losses to reduce or eliminate capital gains taxes
2. Avoid wash sales: Don't repurchase the same or substantially identical securities within 30 days
3. Leverage crypto's advantage: Cryptocurrency has no wash sale rule currently
4. Harvest year-round: Don't wait until December; capture losses as they occur
5. Use automation: Robo-advisors and tax software simplify the process
6. Build a loss bank: Harvest even without gains to create future tax flexibility
7. Replace investments: Maintain market exposure while harvesting
8. Match short-term losses to short-term gains: Maximize tax savings
9. Consider transaction costs: Ensure tax benefits exceed trading costs
10. Track meticulously: Document all sales, purchases, and wash sale calculations

Tax loss harvesting works best as part of a comprehensive tax-efficient investing strategy that includes asset location, holding period management, and regular portfolio rebalancing with tax awareness.

The strategy requires discipline, attention to detail, and good record-keeping, but the tax savings can be substantial and compound over decades of investing.

How Chedr Can Help

Tax loss harvesting shouldn't be complicated or time-consuming. Chedr's AI-powered platform automatically identifies tax-saving opportunities across your entire portfolio—stocks, ETFs, cryptocurrency, and more.

Chedr's tax loss harvesting features:

• Real-time loss monitoring: Alerts you to harvesting opportunities as they occur
• Wash sale tracking: Prevents accidental wash sales across all your accounts
• Optimal lot selection: Automatically identifies which lots to sell for maximum tax benefit
• Replacement recommendations: Suggests similar securities to maintain your portfolio allocation
• Crypto-specific optimization: Leverages cryptocurrency's wash sale exemption for aggressive harvesting
• Multi-year planning: Builds a loss bank and projects future tax savings
• Automated tax forms: Generates Form 8949 and Schedule D with all harvested losses
• Integration with 300+ brokers: Syncs automatically with all your investment accounts

Stop leaving tax savings on the table. Let Chedr optimize your after-tax returns automatically. Start your free trial today →

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Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or investment advice. Tax loss harvesting involves investment risk, including the potential loss of principal. The wash sale rule is complex, and mistakes can result in disallowed losses. Cryptocurrency tax treatment may change as regulations evolve. This guide provides general information and may not address all situations. Please consult with a qualified tax professional and financial advisor regarding your specific circumstances before implementing any tax loss harvesting strategy.