Optimization Walkthrough

Tax-Loss Harvesting

Find harvestable losses in your portfolio, with the estimated tax savings for each.

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Overview

What is Tax-Loss Harvesting?

Tax-loss harvesting (TLH) is the practice of selling investments at a loss to offset capital gains elsewhere in your portfolio. This reduces your tax bill without changing your market exposure (you immediately buy a similar security that is not substantially identical, to keep your allocation). Rikdom checks your brokerage positions to identify harvestable lots, flags wash sale risks, and tracks your harvested losses over time.

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Step by Step

Step-by-Step Guide

1. Connect Your Brokerage

TLH requires cost basis data. Navigate to Holdings → Accounts and connect via SnapTrade.

2. Review Opportunities

Navigate to Intelligence → Optimization → Tax-Loss Harvesting, then press “Scan for Opportunities.” The Opportunities table lists every lot trading below its cost basis.

  • Each row shows the security, the date you bought the lot, quantity, unrealized loss, estimated tax savings, wash sale status, a suggested replacement and the lot's status
  • The largest losses come first; click a column header to sort by tax savings or anything else
  • Wash sale warnings appear if you bought the same security within 30 days before or after
  • A new lot is Pending; you can mark it Executed, Acknowledged or Dismissed

3. Harvest Losses

Rikdom doesn't execute trades. You place them in your brokerage, then record what you did.

  • Log into your brokerage and sell the specified lot (use tax-lot ID matching)
  • Immediately buy a similar security that is not substantially identical, to keep your allocation
  • Example: Sell VTI (Vanguard Total Stock Market), buy ITOT (iShares Total Stock Market)
  • Click “Harvested” on that lot in Rikdom. It moves out of Pending and shows under the Executed filter

4. Read the Summary

The summary at the top of the page totals what is still harvestable.

  • Total harvestable loss and estimated tax savings, each split into short-term and long-term
  • Estimated savings use your own tax brackets once Profile has your filing status and estimated annual income; until then, 32% for short-term losses and 15% for long-term
  • Lots you mark Harvested stay listed under the Executed filter
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Pro Tips

Pro Tips

  • •Avoid wash sales: Don't buy the same security 30 days before or after selling. Use ETF pairs (VTI/ITOT, VOO/SCHX) to stay compliant.
  • •Harvest small losses early: In volatile markets, small losses can become gains quickly. Don't wait for bigger losses—lock in tax benefits as they appear.
  • •Use specific lot ID matching: Most brokerages let you choose which lot to sell. Rikdom tells you the lot date—match it in your brokerage to harvest the exact loss identified.

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