The present value of increased tax liability from tax-loss harvesting is calculated using the formula: (Amount Offset * Future Tax Rate) * (1 + r)^-T, where Amount Offset is the tax losses utilized, Future Tax Rate is the long-term capital gains rate at liquidation, r is the assumed annual rate of return on reinvested tax savings, and T is the number of years until projected portfolio liquidation.

Authors

• Person: Not available Organization: Wealthfront
  Wealthfront Tax-Loss Harvesting - Methodology

Sources

• Wealthfront Tax-Loss Harvesting - Methodology research.wealthfront.com Wealthfront via serper

Referenced by nodes (1)

• tax-loss harvesting concept