Tax-loss harvesting
that doesn't trip a wash sale at the other broker.
Tax-loss harvesting is simple until your money is spread across custodians. Sell a loss at one broker, buy the same fund at another — or in a spouse's IRA — within 30 days, and the IRS disallows the very loss you were harvesting. Formation scans the wash-sale window across every account you've connected, so the loss you book is a loss you keep.
The short answer
Cross-custodian tax-loss harvesting realizes investment losses to offset gains while checking the IRS wash-sale rule across all of your accounts at once — not just one. Under §1091, buying the same or a substantially identical security within 30 days at any broker (or in a spouse's IRA) disallows the loss. Formation scans the unified transaction feed by ticker, flags clear / risk / blocked opportunities, and names the custodian causing the conflict.
Why single-account TLH quietly fails
The wash-sale rule spans every account you own — but almost every tool that offers tax-loss harvesting only watches the account it lives in. So it cheerfully books a loss at Schwab while your automatic investment at Fidelity, or your spouse's IRA contribution, buys the same fund three days later and disallows it. You don't find out until the 1099-Bs arrive and don't reconcile. The more custodians you hold, the more often this happens, and the less any single-broker tool can see it.
How Formation handles it
One unified transaction feed
Formation scans buys and sells across every connected custodian by ticker, with no account filter — so a sell at one broker and a buy of the same or a same-family equivalent at another, within ±30 days, is actually caught.
Clear, risk, or blocked — per §1091
Each opportunity is labeled: clear (no risky buys in the window), risk (a same-family equivalent buy detected), or blocked (the same ticker bought in the window — the loss is disallowed). Blocked losses are excluded from the projected savings, and the card names the offending account.
Vetted replacements, or 'ask your CPA'
For the most common ETFs, Formation suggests cross-family pairs that are conventionally not substantially identical. Where no vetted equivalent exists, it says 'consult your CPA' rather than ship a sketchy pair — conservative on purpose.
A trade list you run, not an order we place
Formation never executes. It produces a reviewed harvest list — what to sell, what to avoid buying, and why — that you run yourself or take to your advisor.
The honest version of a common feature
A loss is only a loss if it survives the wash-sale rule.
Cross-custodian, wash-sale-aware harvesting is one of the few places consumer tools quietly mislead. Formation builds it to be right across accounts — and discloses the one thing it can't see: accounts you haven't connected.
Terms worth knowing
Harvest losses you actually get to keep.
Connect your custodians and let Formation scan the wash-sale window across all of them before you book a single loss.
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Methodology · Harvest savings are EST — they depend on your marginal rate and which lots you sell; Formation does not execute. The wash-sale scan covers connected accounts only; a 1099-B may differ from an average-cost approximation. Not tax advice.
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