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Fall is traditionally peak tax‑planning season. But more firms aren’t waiting. They’re realizing losses all year as opportunities appear. And when you’re harvesting losses at scale, wash sales can quickly become an operational headache.
Let’s break down why wash sales matter and how RedBlack makes them easier to manage.
The wash sale conundrum—and why it matters
A wash sale happens when you sell a security at a loss and buy the same or a substantially identical security within 30 days before or after that sale. When that happens, the IRS disallows the loss. Instead, the loss gets added to the cost basis of any remaining shares.
For RIAs and portfolio managers who harvest losses at the lot level, wash sales are tough to track. You’re juggling:
- substitutes for each client
- multiple accounts per household
- SMAs and partially owned accounts
- the complexity of HNW and family office structures
And even automated checks often stop at the account level, leaving gaps across a client’s full financial picture.
Why does this matter? Because wash sales directly affect a client’s ability to claim losses that offset gains and reduce taxable income. Missing a wash sale or catching it after the fact, means costly manual adjustments and missed opportunities.
This is why firms need technology that monitors trades, understands relationships across accounts, and ensures compliance without slowing advisors down.
Strategies for effective wash sale management
Smart wash sale management protects tax efficiency and keeps portfolios on track.
RedBlack makes this work scalable with:
Real-time detection
Monitor trades as they happen. RedBlack looks for potential wash sales before a trade executes, based on firm‑ and client‑specific rules. This proactive approach helps you stay compliant without slowing workflows.
Comprehensive account management
Wash sales rarely happen in isolation. RedBlack aggregates activity across families, households, SMAs, and partially owned accounts, giving you a full tax picture instead of an account‑by‑account view.
Sequential rebalancing
Utilizing asset location preferences, advisors can allocate client assets while optimizing security selection based on the taxability of client accounts. Our platform does this seamlessly during the rebalancing process with no manual intervention.
Tax-loss harvesting
RedBlack enables advisors to sell securities at a loss either in full or in part, automatically buy a specified substitute, and simultaneously create a restriction to prevent liquidation of the substitute.
Proactive record-keeping
RedBlack tracks wash sale activity automatically and keeps a full history of all harvested losses — including dates, cost basis, and substitutions — so your records stay clean and complete.
A smarter solution: Real-time wash sale detection across account families
We know wash sale tracking is complex. That’s why we built a smarter way to handle it.
RedBlack’s new wash sale detection uses sophisticated logic to identify potential wash sales in real time across all accounts tied to a family or taxpayer, including SMAs and partially owned accounts.
Our multi‑pass evaluation looks across accounts as you rebalance or trade, flagging wash sales even when you’re working across multiple accounts in a single session. That means:
- fewer missed wash sales
- stronger compliance
- better tax efficiency
- zero manual intervention
You get a complete, household‑level view that keeps portfolios aligned and compliant without stepping in the way of your workflow.
Optimizing tax management for fall and beyond
Managing wash sales is a year‑round job. With the right approach, and the right technology, advisors can:
- detect wash sales instantly
- evaluate all accounts for a client or family
- apply multi‑pass logic for accuracy
- maintain detailed records
- stay aligned with IRS rules
- maximize tax‑loss harvesting opportunities
As you move into fall and think about tax planning, RedBlack’s wash sale detection gives you the confidence to make smarter decisions and navigate tax optimization with ease.
Elevate your business
See how RedBlack simplifies wash sale management at scale.
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