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Transition Process Vocabulary

Zero Tax Impact: Transition result is not expected to generate any net gains.

Target Tax Neutral: Gains generated by the transition are expected to be offset by losses generated by the Green Harvest strategy by the end of the transition year with roughly an 85% degree of certainty.

Minimal Tax Impact: Generally, 1% or less of the portfolio value will be due in federal taxes as a result of the transition. This tax impact may be justified by the desire to move to a new portfolio exposure post-transition.

Moderate Tax Impact: Generally, 1% to 5% of the portfolio value will be due in federal taxes as a result of the transition. This tax impact may be justified by the desire to move to a new portfolio exposure post-transition.

Meaningful Tax Impact: Generally, more than 5% of the portfolio value will be due in federal taxes as a result of the transition. This tax impact may be justified by the desire to move to a new portfolio exposure post-transition.

Current Value is the value of the portfolio on the date of the analysis including any existing cash or additional cash contributions.

Unrealized Gain/Loss is the net gain or loss within the portfolio on the date of the analysis.

Total Proceeds for Loss Harvesting is the dollar value of the proceeds sold and including any cash, that GHAM will use to generate losses. The greater the proceeds, the greater the potential value of loss capture.

Transition Estimated Federal Tax Impact assumes federal long-term capital gains rate of 20% plus 3.8% net investment income tax, but NOT any state or local tax.

Net Proceeds Post Transition/Post Tax is the total after-tax value of the portfolio assuming federal long-term capital gains rate of 20% plus 3.8% net investment income tax, but NOT state or local taxes. It may be reasonable for a client to pay a minimal amount of tax in order to implement a meaningful change in their portfolio.

Fed Tax Due as Percentage of the Portfolio is the tax amount due assuming any realized gains will be long-term gains and the client’s federal capital gains tax rate is 23.8% including the net investment income tax. Short-term and state and local taxes would mean a larger tax bill.

Losses Needed for Tax Neutrality are the amount of losses needed, as a percentage of the Green Harvest portfolio value, to offset all realized long-term capital gains realized during the initial transition.

Expected Tracking Error versus Benchmark is an estimate of the past tracking error of the current client portfolio versus a selected Green Harvest strategy benchmark.

Portfolio Turnover is the percentage value of all securities sold to implement a transition.