--- title: Diversify The Tax Harvest To Simplify Asset Allocation description: Diversification enhances tax harvesting for CPAs by providing a wider selection of investments to harvest while providing diversification to mitigate risk. image: https://www.4tfg.com/hubfs/Blog/Diversify-Tax-Harvest.jpg --- [![4thought_footer-logo.png](https://www.4tfg.com/hs-fs/hubfs/4thought_footer-logo.png?width=335&height=101&name=4thought_footer-logo.png "4thought_footer-logo.png")](https://www.4tfg.com/) - [![4Thought Financial Group](https://www.4tfg.com/hubfs/4thought_footer-logo.png)](https://www.4tfg.com/) [![4Thought Financial Group Compass](https://www.4tfg.com/hubfs/4Though-Compass.png)](https://www.4tfg.com/) - [About 4Thought](https://www.4tfg.com/investment-methodology) - [Our Investment Methodology](https://www.4tfg.com/investment-methodology) - [Management Team](https://www.4tfg.com/management) - [In the Media](https://www.4tfg.com/media) - [Contact](https://www.4tfg.com/contact) - [Services](https://www.4tfg.com/investing) - [Private Individual Investing](https://www.4tfg.com/investing) - [SMAs for RIA /Institutional /Family Office](https://www.4tfg.com/financial-advisors-and-institutions) - [Services for CPAs](https://www.4tfg.com/cpa-investing-services) - [Private Wealth Management](https://www.4tfg.com/wealth-management) - [Retirement Plan Services](https://www.4tfg.com/retirement-plan-services) - [Resources](https://www.4tfg.com/resources) - [Financial News](https://www.4tfg.com/resources) - [Portfolio Review](https://www.4tfg.com/portfolio-review) - [Investment Performance](https://www.4tfg.com/performance-requests) - [CPA Continuing Education](https://www.4tfg.com/cpe-continuing-education) - [FAQs](https://www.4tfg.com/faq) - [FAQs](https://www.4tfg.com/faq) - [Contact](https://www.4tfg.com/contact) - Log In - [Goldman Sachs Accounts](https://www.folioclient.com/servlets/ProcessAction?identifier=loginFormEntry&user.mode=IAC) - [Wealth Management](https://wealth.emaplan.com/ema/SignIn?ema) - [Consolidated Reporting](https://client.myadvisorlink.com/auth/users/webportal/4tfg) - [Retirement Plan Services](https://www.4tfg.com/rps-login) - - Log In - [Goldman Sachs Accounts](https://www.folioclient.com/servlets/ProcessAction?identifier=loginFormEntry&user.mode=IAC) - [Wealth Management](https://wealth.emaplan.com/ema/SignIn?ema) - [Consolidated Reporting](https://client.myadvisorlink.com/auth/users/webportal/4tfg) - [Retirement Plan Services](https://www.4tfg.com/rps-login) ## 4Thought Investing Resources ## 4Thought Investing Resources [Financial News](https://www.4tfg.com/resources/) [Investment Strategy](https://www.4tfg.com/resources/topic/investment-strategy) [Personal Finance](https://www.4tfg.com/resources/topic/personal-investing) [Business Finance](https://www.4tfg.com/resources/topic/business-finance) [For Professionals](https://www.4tfg.com/resources/topic/financial-professionals)[Compass and Crosshairs](https://www.4tfg.com/resources/topic/compass-and-crosshairs) SUBSCRIBE Subscribe for free tips and articles to help you lead a smarter financial life. [Financial News](https://www.4tfg.com/resources) ,[Financial Professionals](https://www.4tfg.com/resources/topic/financial-professionals) ,[Investment Strategy](https://www.4tfg.com/resources/topic/investment-strategy) ,[Financial Planning](https://www.4tfg.com/resources/topic/financial-planning) ,[Pro Tips](https://www.4tfg.com/resources/topic/pro-tips) # Diversify The Tax Harvest To Simplify Asset Allocation Diversification enhances tax harvesting for CPAs by providing a wider selection of investments to harvest while providing diversification to mitigate risk. \[fa icon="calendar"\] Jun 16, 2016 10:55:48 AM by [4Thought Financial](https://www.4tfg.com/resources/author/4thought-financial) ![Diversify The Tax Harvest To Simplify Asset Allocation](https://www.4tfg.com/hubfs/Blog/Diversify-Tax-Harvest.jpg) Tax loss harvesting involves the selling of a security that has experienced a loss. By selling the security, the investor realizes or "harvests" that loss and is able to offset taxes on both gains and income. The security that was sold is replaced by a similar one, which maintains the optimal asset allocation. Tax loss harvesting and diversification are two strategies that go hand in hand. They mitigate any potential tax liability and risk, respectively. For example, if a client wants to diversify out of a large holding of stock, tax loss harvesting allows them to offset any gains from the sale with any current losses. This does not disturb the optimal asset allocation but optimizes the offset that a client can deduct on their taxes, especially if their gains outstrip their losses. A simplified asset allocation also enhances the tax harvesting process by putting a plan in place to perform the necessary due diligence for both the buying and selling. By having the right securities in place to replace the securities sold, more intrinsic value can be captured from utilizing different types of securities, such as limited partnerships or even other alternative assets. Simplifying the asset allocation process not only gives investors more variety in their investments but also gives tax professionals more topics to discuss. If a client is invested in certain securities or asset classes, it opens up conversations as to why this is the case. By the merit of a tax professional uncovering needs that has not been addressed, it adds to the effectiveness and credibility that the professional provides. ***Did you know....*** 4Thought has tax harvesting built into our portfolios for easier tax reporting and more effective tax mitigation. Enjoy the tax benefits of a diversified portfolio with a unique investment methodology. ### Other CPA Resources [CPE Continuing Education](https://www.4tfg.com/CPE-continuing-education) [Optimize Conservation of Capital](https://www.4tfg.com/resources/how-can-cpas-help-optimize-conservation-of-capital-embrace-the-next-generation) [Mitigating Your Client's Risk](https://www.4tfg.com/resources/how-can-cpas-mitigate-their-clients-risk-ask-how-does-this-tie-in-with-the-rest-of-your-finances-cpas) [Optimizing Transfer of Wealth](https://www.4tfg.com/resources/have-a-difficult-conversation-now-to-optimize-transfer-of-wealth-cpas) [Making Difficult Conversations Easier](https://www.4tfg.com/resources/making-difficult-conversations-easier) [Conducting You Client's Tax Strategy](https://www.4tfg.com/resources/conducting-the-tax-strategy-of-your-clients) ## Was this article helpful to you? ### Subscribe to our newsletter for free tips and articles to help you lead a smarter financial life. ### Related posts [![Bear, Bull, Wolf & Eagle: The Markets Reimagined & Redefined](https://www.4tfg.com/hubfs/Bear_Bull_Wolf_Eagle-The_Markets_Redefined.jpg)](https://www.4tfg.com/resources/bear-bull-wolf-eagle-markets-reimagined-redefined) [![Understanding Risk in Investing - Part 3 - Investment Methods and Risk Premiums](https://www.4tfg.com/hubfs/Understanding%20Risk%20in%20Investing%20-%20Part%203%20-%20Investment%20Methods%20and%20Risk%20Premiums%2010-13-20%20-%20Thumbnail.jpg)](https://www.4tfg.com/resources/understanding-risk-in-investing-part3-0-1-0) [![Understanding Risk in Investing - Part 2 - Modern Portfolio Theory Quantitative Tools and Statistics](https://www.4tfg.com/hubfs/BaseCamp_Archive/attachments/332823384-all-with-graphic.png)](https://www.4tfg.com/resources/understanding-risk-in-investing-part2-0-1) ## Leave a Comment ### Search 4tfg.com This is a search field with an auto-suggest feature attached. - There are no suggestions because the search field is empty. ### **What Type of Investor Are You?** You have unique investment goals. 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Information throughout this site, including, but not limited to, stock quotes, charts, articles or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the user. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY LINKED WEBSITE. Any opinions presented here are subject to change at any time without notice. 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The GIPS firm definition excludes any third party asset management programs over which 4Thought maintains oversight advisory agreements on behalf of its clients, any arrangements under which 4Thought provides recommendations for client self-implementation, and any assets under advisory but not under direct management (in which 4Thought provides allocation changes or trading signals to third party firms but does not take discretion over the trading of client accounts). GIPS-compliant performance information for 4Thought's strategies may be obtained by email at [info@4tfg.com](mailto:info@4tfg.com); on the 4Thought website at [https://www.4tfg.com/performance-requests](https://www.4tfg.com/performance-requests); or by phone at (516) 300-1617. ```json { "@context" : "http://schema.org", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "", "addressLocality" : "Syosset", "addressRegion" : "New York", "postalCode" : "11791", "streetAddress" : "6851 Jericho Turnpike Suite 120" }, "alternateName" : "4 Thought Financial Group", "areaServed" : { "@type" : "GeoCircle", "geoMidpoint" : { "latitude" : "+40.8100713", "longitude" : "-73.5172286" }, "geoRadius" : "150 km" }, "description" : "Diversification enhances tax harvesting for CPAs by providing a wider selection of investments to harvest while providing diversification to mitigate risk.", "email" : "[GDelorenzo@ClearHorizonGroup.Com, info@4tfg.com, no-reply@4tfg.com]", "image" : "https://www.4tfg.com/hubfs/4Thought-Financial-Group-OG.jpg", "logo" : "http://cdn2.hubspot.net/hubfs/2201374/4thought_header-logo.png", "naics" : "523920", "name" : "4Thought Financial Group", "sameAs" : [ "https://www.facebook.com/4ThoughtFinancialGroup", "https://www.linkedin.com/company/3043702", "https://www.youtube.com/channel/UCEHRK-25mAwfTlNzdvFSN3g", "http://investment-advisors.credio.com/l/39493/4thought-Financial-Group-Inc" ], "telephone" : "516-300-1617", "url" : "http://www.4tfg.com" } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Organization", "name" : "4Thought Financial" }, "dateModified" : "August 8, 2016, 6:17:38 PM", "datePublished" : "2016-06-16 14:55:48", "description" : "Diversification enhances tax harvesting for CPAs by providing a wider selection of investments to harvest while providing diversification to mitigate risk.", "headline" : "Diversify The Tax Harvest To Simplify Asset Allocation", "image" : { "@type" : "ImageObject", "url" : "http://cdn2.hubspot.net/hubfs/2201374/Blog/Diversify-Tax-Harvest.jpg" }, "mainEntityOfPage" : { "@id" : "https://www.4tfg.com/resources/diversify-the-tax-harvest-to-simplify-asset-allocation-cpas", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "http://cdn2.hubspot.net/hubfs/2201374/4thought_header-logo.png" }, "name" : "4Thought Financial Group" } } ```