Tax loss harvesting

M1 does not do tax loss harvesting.  

Tax loss harvesting is when an investor sells securities at a loss to counteract a liability. This strategy is sometimes used to reduce the recognition of short-term capital gains.  

However, all M1 accounts use our tax minimization feature which aims to help users reduce the amount of taxes owed when selling securities. This is accomplished by selling securities in the order of lowest tax burden to highest.  

Here is the list from lowest to highest tax burden: 

  • Short-term capital loss, from the biggest loss to the smallest. 
  • Long-term capital loss, from the biggest loss to the smallest. 
  • Short-term zero gain/loss. 
  • Long-term zero gain/loss. 
  • Long-term capital gains, from the smallest gain to the biggest. 
  • Short-term capital gains, from the smallest gain to the biggest. 
Was this article helpful?
/
0 out of 0 found this helpful