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Tax Loss Harvesting Income Forecast Estimator

This estimator forecasts annual portfolio income after assuming that tax savings from a harvested loss are added to the invested balance. It compounds the combined balance for a selected number of years and then applies an income yield to estimate the annual cash income that balance could produce at the end of the horizon.

The tool separates two assumptions that are often mixed together: capital growth and income yield. That makes it useful for testing how a reinvested tax benefit might affect future dividend, interest, or distribution income without assuming the yield itself is the same as the portfolio’s growth rate.

Calculator inputs

$
$
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years
Result
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Forecast annual portfolio income
Forecast portfolio balance—
Modeled tax benefit invested—
Income attributable to benefit—

1. Enter today’s portfolio
Use the balance whose future income capacity you want to estimate.

2. Add the modeled harvesting benefit
Enter a harvested loss and the tax rate used to value its near-term benefit.

3. Choose a growth rate
This compounds the invested balance during the forecast period.

4. Set the future income yield
Use the annual yield you expect the portfolio to generate at the forecast date.

5. Review total and incremental income
The main result shows total annual income, while the breakdown isolates income linked to the modeled tax benefit.

Tax benefit = Harvested loss × Tax benefit rate; Future balance = (Portfolio + Tax benefit) × (1 + growth)^years; Annual income = Future balance × Income yield

Income yield is applied only at the forecast date. The model does not assume that distributions are paid or reinvested during earlier years.

What the result means

The result is the annual income implied by the forecast portfolio balance and selected yield at the end of the horizon.

Actual investment income, returns, and tax benefits vary; the model does not account for wash-sale disallowance or security-specific distribution changes.

Given: portfolio $180,000, harvested loss $9,000, tax rate 22%, growth 5.5%, yield 3.2%, horizon 6 years.

Calculation: Tax benefit = $1,980. Future balance = $181,980 × 1.055⁶ ≈ $250,922. Annual income = $250,893 × 0.032 ≈ $8,029.

Result: Forecast annual income is about $8,029, of which roughly $87 is associated with the compounded modeled tax benefit.

Why are growth rate and income yield separate?

A portfolio can appreciate at one rate while producing cash income at another. Keeping them separate avoids treating total return and yield as interchangeable.

Does the forecast reinvest dividends each year?

Not explicitly. The growth rate is a single total balance-growth assumption, and the yield is applied only to the ending balance.

Can I use a zero-year forecast?

Yes. A zero-year horizon shows the income implied by the current portfolio plus the modeled tax benefit without compounding.

What if my harvested loss is later disallowed?

Then the modeled tax benefit may not be available as assumed. Wash-sale and other tax rules should be considered before relying on the scenario.

Is forecast income after tax?

No. It is pre-tax portfolio income based on the entered yield. Taxes on future dividends, interest, or distributions are not subtracted.