Tax Loss Harvesting Scanner: How Automated Alerts Work

A tax loss harvesting scanner is a tool that monitors your investment portfolio for positions that have dropped below what you paid for them. When it finds an unrealized loss worth harvesting, it alerts you so you can decide whether to sell and capture the tax benefit.

The core idea is simple: tax loss harvesting only works if you know about the opportunity while it still exists. Markets move every day, and a position that's sitting at a harvestable loss today might recover tomorrow. A scanner watches for you so you don't have to check your portfolio constantly.

If you're not familiar with tax loss harvesting, read our introduction to TLH first.

In theory, you could check your portfolio yourself. Open your brokerage app, look at each position, expand the lots within each position, compare the current price to what you paid, and decide whether any losses are big enough to harvest. In practice, this breaks down for a few reasons:

• You forget to check. Life gets busy. The market drops 3% on a Tuesday, but you're traveling for work or slammed with a project deadline. By the time you log in on Friday, prices have bounced back. The harvesting window closed while you weren't looking.
• Multiple accounts are hard to track. If you have a taxable brokerage, an IRA, a Roth IRA, and a spouse's account at a different brokerage leftover from before you combined finances, you'd need to cross-reference positions across all of them. A loss in your taxable account might trigger a wash sale against a recent purchase in your IRA.
• Lot-level analysis is tedious. Your brokerage might show you an overall gain or loss on a position, but TLH decisions are best made at the individual lot level. You bought shares at different prices over time. Some lots are at a loss, others are at a gain. It's not easy to see the key info at a glance.
• Wash sales can happen by mistake. After you harvest a loss, you and your spouse both need to avoid repurchasing the same security for 31 days. That means tracking dates across securities and accounts. Even an automatic contribution or dividend reinvestment can disallow the loss you just harvested. See our wash sale rule guide for the full details.

The result is that most self-directed investors leave money on the table. They know TLH exists, they know it could save them money, but the ongoing effort of monitoring and tracking is too much to sustain.

A TLH scanner automates the process you'd otherwise do by hand. At a high level, here's what happens:

1. Connect your accounts. You link your brokerage accounts through a secure data provider. The scanner can then read your positions and cost basis data.
2. Identify cost basis. The scanner determines what you paid for each lot. This is the baseline for determining whether a position is at a gain or a loss.
3. Compare to current prices. It pulls current market prices and compares them to your cost basis for each lot. Any lot where the current value is below the cost basis is an unrealized loss.
4. Check for wash sale conflicts. Before flagging a loss as harvestable, the scanner checks whether you've bought the same or substantially identical security within the 30-day window, across all your connected accounts.
5. Send you a notification. When it finds a clean harvesting opportunity (unrealized loss with no wash sale conflict), it sends you an alert. You decide whether to act on it.

The scanner runs on a schedule, so you get notified when opportunities appear without having to remember to check.

Not all TLH tools work the same way. If you're evaluating options, here are the things that matter:

• Lot-level analysis, not just position-level. A position might be up overall, but individual lots within it could be at a loss. A good scanner works at the lot level so you don't miss partial harvesting opportunities.
• Cross-account wash sale detection. The tool should look across all your connected accounts when checking for wash sale conflicts. A tool that only looks at one account will miss conflicts with your IRA or your spouse's account.
• Notifications, not just a dashboard. A dashboard you have to remember to visit is only slightly better than checking your brokerage manually. Email or push notifications that come to you when opportunities appear are much more useful.
• You stay in control. A good TLH scanner is a monitoring tool, not a managed service. It tells you about opportunities and lets you decide what to do. You keep full control of your portfolio, your trades, and your tax decisions.
• Broad brokerage support. The tool should work with the brokerages you already use. Having to move your assets to a specific platform defeats the purpose.

Tax loss harvesting scanners are most valuable for self-directed investors who manage their own portfolios. If you use a robo-advisor like Betterment or Wealthfront, they already handle TLH automatically as part of their service. But if you pick your own ETFs, manage your own asset allocation, and trade through a traditional brokerage, you're responsible for spotting harvesting opportunities yourself.

A scanner is especially useful if you have a day job and can't watch your portfolio all day. Even professional investors benefit when their portfolio is complex enough that scanning by hand isn't practical.

The bigger and more spread out your portfolio, the more a scanner helps. Someone with three ETFs in a single account can probably track things manually. Someone with 15 positions across a taxable account, an IRA, and a spouse's Roth IRA is going to burn time and effort trying to find opportunities while avoiding wash sales.

TLH is also most valuable in taxable brokerage accounts. Gains and losses inside tax-advantaged accounts (IRAs, 401(k)s) don't affect your current-year taxes, so there's no benefit to harvesting inside them. But those accounts still matter for wash sale detection, which is why cross-account monitoring is important.

Harvest IY is a TLH scanner built for self-directed investors. Here's how it works:

• Connect your brokerage accounts through a secure connection. Harvest IY uses your data to scan for opportunities but does not place trades on your behalf.
• The scanner identifies your individual tax lots and compares them against current market prices.
• It checks for wash sale conflicts across all your connected accounts, including detection of substantially identical securities.
• When it finds a harvesting opportunity, you get an email notification with the details: which lots, how much the unrealized loss is, and whether any wash sale risk exists.
• You decide what to do. Harvest IY is a monitor, not an advisor. It tells you what's happening in your portfolio and lets you make the call.

You can also use the TLH savings calculator to estimate how much harvesting could save you based on your tax bracket and portfolio size.

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