She Lost $80K In Her $700K Portfolio. Her Accountant Says Her Advisor Missed A Valuable Tax Opportunity

October 11, 2026 - 17:12

A 51-year-old marketing executive watched her $700,000 taxable brokerage account drop by $80,000 during this year's market selloff. Her advisor told her to stay the course, which was sound advice, but he never suggested using the losses to potentially lower her tax bill. Her accountant later pointed out the missed chance.

The strategy is called tax loss harvesting. When an investment falls below what you paid for it, selling it locks in a capital loss. That loss can offset capital gains elsewhere in the portfolio, plus up to $3,000 of ordinary income each year. Any remaining losses carry forward to future tax years. In a taxable account, this can turn a rough market into a small silver lining.

The executive's accountant estimated the oversight may have cost her several thousand dollars in unnecessary taxes. The advisor's defense was that he did not want to trigger a wash sale or disrupt the long-term plan. Those concerns are valid, but they do not justify ignoring the opportunity entirely. A simple swap into a similar but not identical fund would have kept her invested while capturing the loss.

For investors in taxable accounts, the lesson is clear. Ask your advisor directly whether tax loss harvesting makes sense for your situation. Do not assume it is happening automatically. A few minutes of planning during a downturn can save real money when April arrives.