Tax-Aware Investing in Newport Beach

It’s not what your portfolio earns. It’s what you keep. Holt Investment Partners builds tax awareness into every decision: what we buy, what we sell, when we sell it and which account holds it. We work alongside your CPA so your investments and your tax plan point the same direction.

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Why Taxes Matter More in California

California taxes capital gains as ordinary income. Unlike the federal system, the state gives long-term gains no lower rate, and the top state rate is 13.3%. Add federal capital gains tax and, for many investors, the 3.8% Net Investment Income Tax, and a poorly timed sale can cost a California investor far more than it would cost someone in most other states.

That’s why taxes aren’t something we look at once a year. They’re part of how we manage your money every day.

Tax-Loss Harvesting

Markets go down as well as up. When a holding falls below what you paid, we can sell it to realize the loss and reinvest in a similar, but not identical, investment, so your portfolio stays positioned for the long term.

The realized loss can then:

  • Offset capital gains elsewhere in your portfolio

  • Offset up to $3,000 of ordinary income per year

  • Carry forward to future years if it isn’t used

Hypothetical example: A position bought for $100,000 falls to $80,000. Selling it realizes a $20,000 loss, which could offset $20,000 of gains from selling an appreciated stock, potentially reducing or eliminating the tax on that sale.

We follow the IRS wash sale rule, which disallows a loss if you buy a “substantially identical” investment within 30 days before or after the sale. We also apply this to individual municipal bonds, swapping into bonds from different issuers when it makes sense.

Thoughtful Gain Timing

Selling a winner isn’t just an investment decision. It’s a tax decision. Before we sell anything with a gain, we consider:

  • Holding period: gains on investments held over a year generally qualify for lower federal rates.

  • Which shares to sell: selling specific tax lots, often the highest-cost shares first, to keep the taxable gain down

  • Your income this year: spreading sales over several tax years, or timing them for a lower-income year

  • Offsetting losses already realized elsewhere

Putting the Right Investments in the Right Accounts

Different accounts are taxed differently, and where an investment is held can make a real difference over time. This is often called asset location:

  • Taxable accounts often suit tax-exempt municipal bonds and long-term holdings.

  • IRAs and 401(k)s can be a better home for investments that produce taxable income.

  • Roth accounts may suit holdings with the most long-term growth potential, since qualified withdrawals are tax-free.

Concentrated Positions and Large Gains

Many investors hold a stock that has grown so much they can’t sell it without a large tax bill: employer stock, an early tech purchase, or shares held for decades. We help build a plan to diversify over time, using harvested losses, staged sales across tax years and, where appropriate, gifting strategies coordinated with your CPA and attorney.

Coordinating With Your CPA

We don’t prepare tax returns or give tax advice. We make sure your CPA has what they need and isn’t surprised in April. We regularly coordinate on:

  • Year-end planning: realized gains and losses before December 31

  • Roth conversions: whether and how much to convert in a given year

  • Retirement account withdrawals, including required minimum distributions

  • Charitable giving, such as donating appreciated stock or qualified charitable distributions from IRAs

  • Estimated tax payments after large sales

Planning for the Next Generation

Under current law, many investments receive a step-up in cost basis at death, which can erase built-in gains for heirs. For married couples in California, community property rules may allow a step-up on both halves of community property. That can change whether it makes sense to sell an appreciated holding now or keep it. We factor this in and coordinate with your estate attorney.

Frequently Asked Questions

Do you prepare my taxes?
No. We manage your investments with taxes in mind and work directly with your CPA, who handles tax preparation and tax advice.

Is tax-loss harvesting right for everyone?
No. It’s most useful in taxable accounts and for investors with gains to offset. It doesn’t apply inside IRAs or 401(k)s, and it can lower your cost basis, which may mean more tax later if the investment recovers.

Can you work with my existing CPA?
Yes. Most of our clients keep their CPA, and we coordinate directly with them.

Do you harvest losses on bonds too?
Yes, when it makes sense. Municipal bonds that have fallen in price can sometimes be swapped for similar bonds from a different issuer, realizing a loss while keeping your income steady.

When does this planning happen?
All year. Many opportunities, like harvesting losses during a market decline, come and go quickly, and a year-end-only review would miss them.

Let’s Talk About What You’re Keeping

If you’re paying more in taxes on your investments than you need to, or you’re not sure, we’d be glad to take a look.

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302½ Marine Avenue, Balboa Island, Newport Beach, CA 92662 · (949) 342-5405

Holt Investment Partners LLC is an investment adviser registered with the California Department of Financial Protection and Innovation. Registration does not imply a certain level of skill or training. Holt Investment Partners does not provide tax or legal advice; consult your tax professional and attorney regarding your specific situation. Tax-loss harvesting may not be appropriate for all investors, does not guarantee tax savings, and may reduce cost basis, which can increase taxes in future years. Tax laws are subject to change. Examples are hypothetical and for illustration only. Investing involves risk, including possible loss of principal.