Reduced Client’s Tax Bill Through Tax Loss Harvesting

The Challenge

Our client had recently sold a real estate investment property, and due to savvy timing and a booming real estate market, had a large, realized capital gain resulting from the sale. However, this also meant that she owed Uncle Sam a 15% capital gains tax totaling tens of thousands of dollars. As a wealth management firm, we strategically looked at her investment management options. 

Our Solution

When there is a sharp decline in the market, and thus the value of one’s investments, there’s usually also an opportunity to generate tax savings for the current and future years. This is done through the process of Tax Loss Harvesting. In early 2022, there happened to be a moderate decline in the markets. Our investment advisors recognized this opportunity and took advantage of the down market to offset her capital gains from the sale of investment real estate. As hands-on wealth advisors and certified financial planners, we used Tax Loss Harvesting for many of our clients during this time period and created tax offsets of several thousands of dollars.

The Result

Fortunately for this client, the timing of her large capital gain coincided with a drop in the markets, and we proactively booked losses for her through Tax Loss Harvesting. Due to the size of her investment portfolio and the gain on the sale of the property, this resulted in a tax savings worth tens of thousands of dollars. Before partnering with Morgan Rosel wealth management firm, our client was with a different financial investment advisory firm and was previously unaware of the Tax Loss Harvesting strategy. If you are interested in learning more about Tax Loss Harvesting, please check out our blog post.

As wealth management advisors in Denver specializing in high-net-worth clients, we understand the importance of an active approach to investment management and a relentless focus on tax reduction and efficiency. Tax Loss Harvesting is a tedious and time-consuming process and as a result, not all wealth management firms take the time to capture these losses for their clients. We believe this is not only a missed opportunity, but a tremendous disservice to clients who deserve better. If you are interested in speaking with a Morgan Rosel Wealth Management advisor about your investment management strategy, please contact us.

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