Contents

Introduction Set Annual Capital Gains Budget for an Account or Group Set Annual Capital Gains Budget for Many Accounts or Groups at Once Review the Capital Gains Tax Budget During a Rebalance

 

Introduction

One way you can use Tamarac for tax loss harvesting is to create an annual capital gains tax budget to track the amount of capital gains taxes realized year to date and compare it with the maximum allowable capital gains tax amount.

You can set up an annual capital gains tax budget for accounts, groups, or both. Non-taxable accounts are not monitored for tax budgets. Group tax budgets exclude non-taxable account values.

This page provides steps for how to set up an annual capital gains tax budget. For more information about capital gains tax budgets, see Using the Annual Capital Gains Tax Budget.

Set Annual Capital Gains Budget for an Account or Group

To set up the capital gains budget for one or more accounts:

1. On the Accounts menu, click Accounts.

2. Click the account you want to edit.

   If you're editing multiple accounts, select the check box next to each account and, in the Actions menu, click Edit.

3. On the Rebalancing tab, click Tax Management.

4. Configure the following settings:

   

   • ST capital gains tax rate: Enter the desired rate for the account.

   • State tax rate: Enter the state tax rate for the account.

   • LT capital gains tax rate: Enter the desired rate for the account.

   • Annual capital gains tax budget: Enter the desired rate for the account or group.

     • If Tamarac Trading should not perform the budget check, select No limit. Use this option when you don’t want to formalize the annual capital gains budget process. Tamarac Trading won’t compare realized gains or estimated taxes against a budget or display budget warnings.

   If you haven't previously configured tax rates, get started quickly by setting all clients to the same short-term and long-term rates and all accounts or groups to the same budget percentage—for example, 1%.

5. Click Save.

Set Annual Capital Gains Budget for Many Accounts or Groups at Once

To update these values for many accounts or groups at once:

1. On the Reports menu, under Global Reports, click Bulk Reports.

2. Create an Account Information bulk report.

3. Under Available columns, add at least the following to the Selected columns list:

   • Upload Account ID
   • Annual Capital Gains Tax Budget
   • Annual Capital Gains Tax Budget Value Type

4. Run the bulk report. For more information, see Run a Bulk Report to Export Data in Bulk.

5. Upload the data into Tamarac using an Account Information upload data set. For more information, see Upload Bulk Data.

Understand how Trading measures the budget

Understand how Tamarac Trading calculates gains, applies tax rates for accounts and rebalancing groups, and determines whether those gains exceed the configured budget.

How Tamarac calculates gains

Tamarac Trading calculates net long-term (LT) and short-term (ST) gains separately. For each, it starts with the realized year-to-date gain, adds the estimated gain from the rebalance, and subtracts any loss carry-forward.

If one result is a gain and the other is a loss, Tamarac Trading nets the two amounts together.

How Tamarac Trading checks the budget

After calculating the gains, Tamarac Trading compares them with the configured budget.

For percentage-based budgets, Tamarac Trading bases each calculation on the account value at that point in the process. It compares the initial amount with the initial account value and the rebalanced amount with the rebalanced account value.

If the budget is set to No limit, Tamarac Trading skips the budget check and does not display budget warnings.

Review the Capital Gains Tax Budget During a Rebalance

The Rebalance Summary report offers a way to see the capital gains tax budget for an account or group at a glance. On the YTD Realized Gain/Loss widget, you'll see a graph of positive capital gains values compared to the value entered in the Annual Capital Gains Tax Budget setting.

This chart gives you an at-a-glance view of capital gains taxes for the year to help you make tax-aware trading decisions.

The widget shows the budget minus the measured amount, and the percentage of budget used. Tamarac Trading shows a warning only when the amount exceeds the budget. It doesn’t block or change trades.

When viewing this widget, you won't see a chart in the following circumstances:  

• When viewing a non-taxable account or a group without any taxable accounts.
• If there is no capital gains tax budget set for the account or group you're viewing.