Every Dollar Saved in Taxes is a Dollar That Keeps Working for You

1. Tax Loss Harvesting: Turning Market Losses into Tax Savings

What Is Tax Loss Harvesting?

Tax loss harvesting is the process of selling investments at a loss to offset taxable gains elsewhere in your portfolio. This strategy helps lower your net capital gains tax, reducing how much you owe to the IRS.

Why It Works: The IRS only taxes net capital gains, so selling losing investments allows you to deduct those losses from your taxable gains, lowering your overall tax bill.

How It Works in 3 Steps:

Step 1: Sell an Investment at a Loss – Identify assets that have declined in value and sell them to realize the loss.

Step 2: Offset Gains with Losses – Use those losses to cancel out taxable capital gains from other investments.

Step 3: Stay in the Market – Immediately reinvest the proceeds into a similar (but not identical) investment to maintain portfolio exposure.

Example: How Tax Loss Harvesting Saves Money

• Investor A has a $100K gain in Stock A → Taxable at 20% = $20K tax owed
• Investor A also has a $50K loss in Stock B → Uses loss to offset gain
• New taxable gain = $50K instead of $100K → Tax owed is only $10K instead of $20K
• Result? $10K in tax savings without altering overall portfolio strategy

Bonus: If your losses exceed your gains, you can deduct up to $3,000 against ordinary income and carry forward any remaining losses to future years.

2. Tax Bracket Management: Controlling When & How You Pay Taxes

Why Timing Matters

For high-income earners, understanding how different types of income are taxed is crucial. The goal is to minimize taxable income in high-tax years and defer gains into lower-tax years.

Tax-Smart Income Strategies

Delay Large Capital Gains – Selling assets in a year with lower income results in a lower tax rate. Roth Conversions in Low-Income Years – Converting pre-tax retirement funds to Roth accounts when in a lower tax bracket allows for tax-free growth later. Spreading Out Withdrawals – Taking smaller withdrawals from retirement accounts reduces overall tax exposure.

3. Asset Location: Putting Investments in the Right Accounts

The Problem: Not All Investments Should Be Taxed the Same Way

Many investors unknowingly hold tax-inefficient investments in taxable accounts, paying unnecessary taxes on dividends and interest.

Solution? Place the right investments in the right accounts to maximize tax efficiency.

Where to Hold Different Investments for Maximum Tax Savings:

Example:

A high-net-worth investor holds a REIT in a taxable brokerage account—they’re now paying ordinary income tax (up to 37%) on dividends.

Better Strategy? Hold the REIT in an IRA or 401(k) to let dividends grow tax-deferred—potentially saving tens of thousands in taxes over time.

4. Tax-Efficient Withdrawals in Retirement: The Right Order Matters

Why It’s Important

When drawing down retirement funds, the order of withdrawals can significantly impact how much tax you owe.

Best Withdrawal Strategy for Minimizing Taxes

Start with Taxable Accounts – Withdraw from brokerage accounts first (taxed at lower capital gains rates). Then Use Tax-Deferred Accounts (Traditional IRA, 401(k)) – Withdraw next to stay in lower tax brackets. Save Roth IRA for Last – Roth withdrawals are tax-free, making them the best source of funds in later years.

By strategically pulling from different accounts, investors can dramatically lower lifetime tax payments.

The Wealthy Plan Proactively—Do You?

Sophisticated investors don’t wait until tax season—they plan year-round to help minimize taxes and keep more of what they earn.

At Finley Davis Private Wealth, we help high-net-worth individuals:

·         Implement tax loss harvesting strategies

·         Optimize asset location for tax efficiency

·         Manage withdrawals and income timing to reduce tax burdens

Let’s make sure your investments are working for you—not the IRS.

Schedule a tax strategy consultation today.

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Past performance is no guarantee of future results. Personnel of RiskBridge Advisors, LLC (“RiskBridge”) prepared this material. The views expressed herein do not constitute research, investment advice, or trade recommendations. RiskBridge may, from time to time, participate or invest in transactions with issuers of securities that participate in the markets referred to herein, perform services for or solicit business from such issuers, and/or have a position or effect transactions in the securities or derivatives thereof.

This material is distributed for informational purposes only. All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed, and RiskBridge makes no representation as to its accuracy or completeness. Any opinions, recommendations, and assumptions included in this material are based upon current market conditions, reflect the judgment of RiskBridge as of the date indicated, and are subject to change without notice. You acknowledge and agree that RiskBridge is not obligated to provide any additional information or update such information in making the information available. Securities and/or indices highlighted or discussed in this communication are mentioned for illustrative purposes only and should not be construed as investment recommendations. All investments involve risk, including the loss of principal. Before implementing any strategy, consult with a qualified financial adviser and/or tax professional. This information is not intended to provide investment, tax, or legal advice, and this material is not to be relied upon in substitution for the exercise of independent judgment. This material is not to be reproduced, in whole or part, without the written consent of RiskBridge.

Tax and legal services are not provided by Lion Street Financial, LLC, and Lion Street Advisor, LLC.