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Tax Loss Harvesting After Tax Value Estimator

This estimator projects the after-tax value of a tax-loss-harvesting decision using your own tax rates and investment assumptions. It treats the harvested loss as creating a current tax benefit, assumes that benefit is reinvested, and subtracts a simplified future tax cost associated with the deferred gain.

The result is a planning estimate rather than a tax-return calculation. Actual treatment can depend on the type of gain or income offset, holding period, basis, future sales, and wash-sale rules. IRS guidance states that wash-sale losses can be disallowed when substantially identical securities are acquired within the applicable 30-day window around a loss sale.

Calculator inputs

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years
Result
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Projected after-tax portfolio value
Estimated current tax benefit—
Future deferred-tax cost—
Net modeled harvest benefit—

1. Enter the portfolio value
Use the amount whose future value you want to project.

2. Enter the loss you expect to harvest
Use only the loss amount you are modeling as tax-effective after considering your situation.

3. Set current and future tax rates
The current rate values the immediate benefit; the future rate values the modeled deferred-gain tax cost.

4. Choose return and horizon
Enter an annual return assumption and years until the modeled future realization.

5. Read the after-tax projection
The breakdown separates the current tax benefit, future deferred tax, and net modeled benefit.

Current tax benefit = Harvested loss × Current tax rate; Reinvested benefit = Current tax benefit × (1 + return)^years; Net modeled benefit = Reinvested benefit − Harvested loss × Future tax rate

Projected after-tax value adds that net modeled benefit to the future value of the starting portfolio. This simplified model does not reconstruct tax lots or apply statutory loss limits automatically.

What the result means

The main result is the modeled future portfolio value after adding the compounded tax benefit and subtracting the assumed deferred-tax cost.

Tax-loss harvesting can be affected by wash-sale rules and individual tax circumstances; use this as a scenario tool, not personalized tax advice.

Given: portfolio = $120,000, harvested loss = $12,000, current tax rate = 28%, future rate = 20%, return = 6%, horizon = 8 years.

Calculation: Current benefit = $12,000 × 0.28 = $3,360. Reinvested benefit = $3,360 × 1.06⁸ ≈ $5,355. Deferred tax cost = $12,000 × 0.20 = $2,400. Net modeled benefit ≈ $2,955. Base future portfolio = $120,000 × 1.06⁸ ≈ $191,262.

Result: Projected after-tax value ≈ $194,217 under these assumptions.

Why is there a future tax cost?

Harvesting a loss can lower the replacement position’s effective tax basis or otherwise defer tax rather than eliminate it. This model represents that deferral with a user-entered future tax rate.

Does the calculator enforce the wash-sale rule?

No. It assumes the loss you enter is usable. IRS Publication 550 explains that a loss can be disallowed when substantially identical securities are acquired within the wash-sale window.

Which tax rate should I enter for the current benefit?

Use the marginal rate that best represents the tax item the loss is expected to offset in your scenario. Different portions of a loss can have different tax effects.

Why can the modeled benefit be negative?

If the future tax cost is high relative to the compounded current tax savings, the simplified net benefit can fall below zero.

Does this include transaction costs or tracking error?

No. Trading costs, bid-ask spreads, replacement-security performance differences, and portfolio-management effects are outside this calculation.