I Harvested $374 in Tax Losses on SPY — Here's Exactly How

The Alert

I got this email from Harvest IY last night: $237.60 in unrealized losses on my SPY position.

I executed the harvest the next morning — and actually locked in $374 in realized losses, because the market dropped further overnight. Here's exactly what I did and why.

The Trade

The trade itself was simple — two orders placed back-to-back:

• Sold 20 shares of SPY at $668.22 → $13,364 in proceeds
• Immediately bought 530 shares of SCHB at $25.73 → $13,637 invested (we had a little extra cash to put to work)

The result? Basically the same broad market exposure. Actually, more diversified — SCHB (Schwab U.S. Broad Market ETF) holds about 2,400 stocks compared to SPY's 500. That's a better spot on the efficient frontier, if you ask me.

The Tax Benefit

That $374 realized loss offsets $374 of income (or capital gains) at tax time.

At a 24%+ marginal tax rate, that's roughly $90 back in my pocket. From one trade. On one position.

Now imagine doing this across your entire portfolio, multiple times a year, whenever the market dips. The savings compound — and they add up to real money over time.

Watch Out: Wash Sales

There's one important gotcha: wash sale rules. If you buy back SPY — or anything "substantially identical" — within 30 days before or after the sale, it triggers a wash sale and can negate the tax benefit.

This applies across all your accounts, including your spouse's accounts and IRAs. So I flagged it with my spouse and our financial advisor: no one buys SPY in any of our accounts for 30 days.

Honestly, I prefer total market indices like SCHB, ITOT, or SPTM anyway. Broader diversification, similar returns, and they make it easy to avoid wash sale issues when harvesting losses on SPY.

How Harvest IY Helped

The alert that kicked off this whole trade came from Harvest IY. It monitors your brokerage portfolio and emails you when there are losses worth harvesting. It also helps you keep track of wash sale windows so you don't accidentally trigger one.

I probably would have missed this opportunity. The position was only down about 1.8% — not enough to catch my eye on a casual portfolio check. But $90 in tax savings is $90 in tax savings.

If you're not tax loss harvesting, you're leaving money on the table every year.

Try Harvest IY →