Tax Managment

More than just tax-loss harvesting

Tax-loss harvesting—selling a basket of securities at a loss and simultaneously replacing it with a different basket of
securities—helps clients reduce their tax risk while maintaining their market exposure. It’s an important tax-management
tool. But it’s not the only one, and Parametric doesn’t stop there.

Our tax-management solutions also include:

Tax-efficient transitions.

Use proprietary tools to help investors balance the capital gains they’re willing to realize against an acceptable percentage of tracking error to the desired benchmark exposure.

Gain-realization deferral

We evaluate which securities to sell now and which to hold on to, with the expectation of future loss harvesting at the opportune time.

Holding-period management

Determine the client’s optimum time to hold a security, with an eye toward differing tax rates for short- and long-term gains.

Yield consideration

Advise on the treatment of dividend income, since most dividends can qualify for a lower tax rate if the security is held longer than the minimum threshold.

Tax-lot consideration

Identify ideal tax lots to trade—particularly if investors need to generate cash flow from their portfolio.

Wash-sale avoidance.

Helping investors navigate the IRS’s rules on wash sales (repurchasing a security within 30 days of its sale) so they don’t miss out on loss opportunities.

Charitable gifting.

We work with investors to select highly appreciated stocks to gift to a tax-exempt charitable organization, donor-advised fund, or family members in lower tax brackets.