Tax Coordination is designed to avoid rebalancing that would realize taxable gains as a function of its regular tax-efficient rebalancing formula. Regular rebalancing as a result of tax-coordination will occur in your taxable account without realizing taxable gains when possible (for example, when securities are trading at a loss). However, in certain circumstances, rebalancing may occur in the taxable account portion of a TCP that realizes taxable gains.
For example, withdrawals or transfers out of the TCP can force rebalancing in the taxable account that could result in realizing taxable gains. You can read more about that in the section below: “How do large withdrawals affect my Tax Coordination?”