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Michael is a Partner and Portfolio Manager at Evercore Wealth Management, managing investment assets for families, foundations and endowments.
Michael joined Evercore in 2019 from Fieldpoint Private, a boutique private bank headquartered in Greenwich, Connecticut, where he served for two years as a senior investment advisor, providing asset allocation, security selection, and estate and tax planning advice to high net worth clients. He previously worked for 13 years as a senior portfolio manager at U.S. Trust, managing $2 billion in assets for families and foundations.
Prior to joining U.S. Trust, Michael worked in education and policy as a charter member of Teach for America and as the manager of external relations at the Manhattan Institute.
Michael received a B.A. at Rutgers College and an M.B.A. from the New York University Stern School of Business. He serves on the board of LEEP Dual Language Charter School in Brooklyn.
Tax-loss harvesting means selling an investment at a loss to offset capital gains. Over the last 20 years, it’s been applied to stocks, which tend to be more volatile than bonds. But the recent and severe bond market dislocation has provided investors with harvesting opportunities in both markets.Quite simply, this means selling shares of a loss-making security and applying the loss against realized gains taken in other investments. Critically, the security must not have been purchased under 31 days before the sale, or repurchased in under 31 days after the sale. Repurchasing in under 31 days triggers what is known as a wash sale and negates the realized loss for tax purposes.
The most straightforward approach is simply selling the investment at a loss, be it a mutual fund, an exchange traded fund, a stock, a bond, or another investment. By selling and realizing the loss and keeping the proceeds in cash, assuming the wash sale rule is respected, the loss can be used against realized gains.
Alternatively, the loss-making investment can be swapped for a similar, albeit not identical investment, such as a closely correlated index fund or individual security, to maintain the overall asset allocation. It’s important to note that the newly purchased security must be sufficiently different from the sold security; for instance, selling one S&P 500 index fund and buying another would trigger a wash sale, as would selling and buying the same fund or security through different investment vehicles. For a bond tax-loss swap to avoid the wash sale rule, it must have at least two of the three following characteristics: a different issuer (name of the issuing entity); a different coupon; and a different maturity. This rule provides the bond manager enough flexibility to take tax losses across a bond portfolio and avoid wash sale rules, while maintaining the basic duration, liquidity, and credit quality of the portfolio.
Keep in mind that gains and losses incurred on investments held less than a year are taxed at higher rates than those on longer-term investments. There can also be transaction costs to consider.
Efficient tax-loss harvesting requires careful planning and close consultation with your portfolio manager and tax advisor. But the right tactical moves, in the context of a well-thought-out investment strategy, can help support the long-term goals of income and capital appreciation, even at the end of a very challenging year.
Michael Kirkbride is a Managing Director and Portfolio Manager at Evercore Wealth Management. He can be contacted at michael.kirkbride@evercore.com.
To learn more about tax-loss harvesting, please view Michael’s recent video at https://www.evercorewealthandtrust.com/tax-loss-harvesting-pros-cons/.
Volume 46 of Independent Thinking® by Evercore Wealth Management provides insights into navigating volatile financial markets, heightened inflation, and a rapidly shifting economic landscape.
The publication discusses the implications of a strong U.S. dollar, strategies for investment positioning amid rising interest rates, and the benefits of tax-loss harvesting in a down market. It also addresses the importance of specialized planning for families with special needs and offers perspectives on aging and wealth.
The edition emphasizes resilience, adaptability, and the value of long-term planning in the face of uncertainty. The overarching message is one of maintaining perspective and leveraging opportunities even in challenging times.
Investment and Wealth Management services are provided by Evercore Wealth Management, LLC an investment advisor registered with the U.S. Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940. Registration with the SEC does not imply a certain level of skill or training. Trust and custody services are provided by Evercore Trust Company, N.A. a national trust bank regulated by the Office of the Comptroller of the Currency.
Client retention rate is based on data from 06/30/24 – 06/30/25. Assets under management are as of 06/30/25
