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Sell Entire Security/Sell Only Losses
Tax Loss Rebalance Settings on the Rebalancing System Settings page allow you to customize how Tamarac Trading applies some trade rules when performing either a Tax Loss Harvesting & Rebalance or Tax Loss Harvesting Rebalance. Sell entire security or Sell only losses let you control how securities with losses will be treated during one of the tax loss harvesting rebalances.
This setting only applies to the tax loss harvesting rebalance types: Tax Loss Harvesting & Rebalance and Tax Loss Harvesting Rebalance.
These are the options available:
Sell entire security. Tamarac Trading will sell out of the entire security if the net loss of all lots exceeds the loss thresholds specified in each account's settings.
Sell only losses. Tamarac Trading will sell only the lots that have incurred losses for the security that is beyond the loss threshold you specified, and will not sell the lots that do not meet the loss criteria or have gains.
For example, a client's tax loss harvesting thresholds are 15% and $5,000. The client has a security with 10 lots. Seven of those lots have gains and three have losses, and the average loss and net loss surpass the account thresholds:
With the Sell only losses option selected, when you perform a Tax Loss Harvesting rebalance, only the three lots with losses will be sold. The losses on the individual lots do not need to meet the loss threshold, only the average of losses for the security:
With the Sell entire security option selected, when you perform a Tax Loss Harvesting rebalance, all 10 lots of the security will be sold:
