Experience the next generation of tax loss harvesting

Experience the next generation of tax loss harvesting

What is Tax Loss Harvesting?

Tax loss harvesting is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on both gains and income. The sold security is replaced by a similar one, maintaining the optimal asset allocation and expected returns.

  • The Upside to Capital Losses

    Realized losses on investments can offset gains and reduce ordinary taxable income by as much as $3,000 per year.

  • Making it Accessible

    Tax Loss Harvesting+TM is automated and available at no additional cost to investors who are managing money with us.

  • Optimizing the Strategy

    Tax Loss Harvesting+ runs throughout each day and can reduce tax exposure better than other automated harvesting tools.

Additional after‑tax returns with Tax Loss Harvesting+

+$44,692 gains

+0.77% returns

  • Betterment portfolio with Tax Loss Harvesting+
  • Betterment portfolio
Assumes an initial investment of $50,000 at a 70% stock allocation, with bimonthly incrementing deposits of $750. About this data

How Tax Loss Harvesting+ compares

Tax Loss Harvesting+ Traditional TLH

Automated, daily tax loss harvesting

Betterment TLH+ checks all of your tax lots daily for harvesting opportunities.


No extra trading costs to harvest losses

All harvest transactions are covered by your Betterment management fee.


Every harvested dollar reinvested

Some tax loss harvesting methods avoid reinvesting dividends and hold cash deposits until after wash periods have passed, for simplicity. Our algorithm is built to handle this complexity, so your portfolio will never hold cash. Tax Loss Harvesting+ is specifically optimized to allow you to always be invested while navigating wash sales.


No short-term capital gains tax, ever

Some tax loss harvesting methods switch back to the primary ETF after the 30-day wash period has passed. This can create short-term capital gains tax that may dramatically reduce the benefit of harvesting losses and even leave you owing more tax. Our algorithm only moves back to the primary ETF when it is appropriate for your account.


IRA harvest protection

Selling an ETF for a loss in your taxable account, and then buying the same ETF in your IRA, can cause a permanent wash sale, destroying the benefit of loss harvesting entirely. We guarantee that IRA deposits will never undermine a harvest.


Harvests rebalance

When shares are sold at a loss, the proceeds are intelligently reinvested in the asset classes that will bring your portfolio back into balance, rather than simply defaulting back to the asset class they came from. Betterment trades in fractional shares, which allows our algorithms to harvest and rebalance every penny of your account for maximal potential tax benefit.


Customer-realized losses protected

Tax Loss Harvesting+ minimizes wash sales, directing cash in‑flows into parallel assets. The system protects not just harvested losses, but also any losses realized by the customer.


Additional Resources

White paper

Read more on Betterment Tax Loss Harvesting+ in our white paper

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