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Advisor Insights

Wash Sale Challenge: What Is Substantially Identical?

The key to proper tax-loss harvesting comes down to "facts and circumstances."

In times of market volatility like we have had over the past year, the most effective advisors are busy harvesting tax losses to help offset their clients’ realized gains.

The easy part is to identify positions that have accumulated significant losses and then sell them to recognize the losses for tax purposes. But then, how to maintain the clients’ investment allocations after the sale? That’s where the complications begin.