10/19/2026
Year-end means harvest season. Not crops, tax harvesting. (Our Eastern Shore clients should appreciate that joke!) Most people are familiar with tax loss harvesting. Gain harvesting gets less attention, but for some of our clients it can be just as valuable.
For our clients with taxable accounts, good tax planning tells us when it makes sense to harvest gains and when to harvest losses.
Losses: Many bonds bought when rates were low are still sitting below what we paid. That window closes on its own. As bonds approach maturity they drift back toward par, and the loss shrinks. While it’s open, those losses can offset gains elsewhere. With equities having run the last few years, that’s especially useful when rebalancing. Harvesting bond losses lets us trim stocks with less of a tax bill. Where applicable, we're doing this.
Gains: This is the more enjoyable one. For clients in the 0% capital gains bracket, we can sell appreciated positions, owe no federal tax on the gain, and buy right back, since there’s no wash-sale rule on gains. That resets the cost basis higher, so the next sale, maybe years from now in a higher bracket, carries a smaller gain. And if the position drops, there’s now a loss to harvest that didn’t exist before. When we manage a sell-down of legacy positions or set a tax budget for a client, we do it with this in mind. This starts with good financial planning.
One caution for those of us in Maryland and Delaware: 0% federal isn’t 0% state. Both states tax capital gains as ordinary income, and realized gains still count toward things like IRMAA and Social Security taxation. We always run the numbers first, Federal and State.
None of this is flashy. It’s the low-hanging fruit of tax management, done every year, so clients keep more of what they earn. After-tax returns are what matter and what we pay attention to.
As always, this isn't specific tax advice and you SHOULD also talk to your tax professional about this.
