New feature for managed portfolio clients may generate tax benefits
November 15, 2017 — OMAHA, Neb.–(BUSINESS WIRE)–Your investments should be positioned to help you attain your goals while being tax efficient at the same time. TD Ameritrade Investment Management, LLC, a registered investment advisor subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD), today announced a new tax-loss harvesting strategy that can help everyday investors make their portfolios more tax-efficient.
“In the past, only the wealthiest investors could afford to reap the greatest benefits of effective tax management strategies. Times have changed. TD Ameritrade’s new feature can help to streamline tax strategies, providing great value and ease for our managed portfolio clients,” says Lule Demmissie, managing director of investment products and guidance at TD Ameritrade. “Our clients have asked for these capabilities, and we’re pleased to now offer them – at no additional cost.”
Reinvest in replacement securities
Tax-loss harvesting monitors investors’ portfolios daily while they focus on their everyday lives. This strategy harvests or “realizes” losses and reinvests them in replacement securities, allowing investors the potential to offset taxes on both gains and income while retaining their desired portfolio allocations. With TD Ameritrade’s new offering, clients with ETF-based managed portfolios through Essential Portfolios and certain Selective Portfolios can opt into these strategies with just one click.
How it works: Once a client opts in, TD Ameritrade Investment Management will analyze each client’s portfolio daily, searching for opportunities to initiate tax-loss harvesting. When such an opportunity arises, TD Ameritrade Investment Management will sell the position for the client and invest the proceeds in a replacement security.
“Tax season shouldn’t just be the first few months of the year,” continues Demmissie. “With one simple click, our clients can potentially receive a tax benefit come mid-April, all while staying in the market and maintaining their asset allocations.”
To learn more about the new tax-loss harvesting feature available for Essential Portfolios and Selective Portfolios clients, visit https://www.tdameritrade.com/investment-products/managed-portfolios.page.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (Nasdaq: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how – bringing Wall Street to Main Street for more than 40 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information, or read our stories at Fresh Accounts.
TD Ameritrade Investment Management, LLC (“TDAIM”) and its affiliates do not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances as to whether the TDAIM tax-loss harvesting feature is appropriate for you. This feature generally would be more beneficial to investors in higher tax brackets and high-tax states.
The tax-loss harvesting feature is currently only available with the TDAIM ETF-based portfolios in taxable TD Ameritrade Investing Accounts. Tax-loss harvesting is not appropriate for all investors. Investing in securities involves risk of loss that the client should be prepared to bear. TDAIM does not represent or guarantee that the objectives of the tax-loss harvesting feature will be met. The performance of the replacement securities purchased through the TDAIM tax-loss harvesting feature may be better or worse than the performance of the securities that are sold for tax-loss harvesting purposes. TDAIM only reviews each account that is managed by it individually to help ensure that your account does not violate the “wash sale” rule. When you enroll in the tax-loss harvesting feature, the enrollment is on an account basis and does not apply to other TDAIM portfolios you may have. Each eligible TDAIM portfolio must be enrolled separately in the TLH feature. Accordingly, you are responsible for monitoring your brokerage accounts and your spouse’s brokerage accounts at TD Ameritrade or elsewhere to ensure that transactions in the same security or a substantially similar security do not create a wash sale. The wash sale rule postpones losses on a sale, if replacement shares are bought around the same time.
Prior to enrolling in the tax-loss harvesting feature, please read TDAIM’s whitepaper and see the TDAIM Disclosure Brochure (Form ADV Part 2A) http://www.tdameritrade.com/forms/TDA4855.pdf
Advisory services are provided by TD Ameritrade Investment Management, LLC (“TD Ameritrade Investment Management”), a registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade Investment Management provides discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Disclosure Brochure (Form ADV Part 2A) http://www.tdameritrade.com/forms/TDA4855.pdf
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