Methodology

Tax-Loss Harvesting Guardrails

Midas Edge surfaces taxable positions with unrealized losses only after applying account-type and wash-sale guardrails. The output is an informational screen, not tax advice or tax-lot optimization.

Eligibility Pipeline

The scan starts with linked investment positions, keeps only taxable account subtypes, requires a ticker and cost basis, then keeps only positions with unrealized losses.

candidate = taxable_account
  && ticker_present
  && cost_basis_present
  && unrealized_gain < 0
  && no_wash_sale_risk

Wash-Sale Rule We Enforce

Before a loss is shown as harvestable, Midas Edge checks for buys of the same ticker within the 61-day wash-sale window: 30 days before the reference sale date, the sale date, and 30 days after. If a linked account has a matching buy in that window, the suggestion is suppressed from the tax-loss harvesting surface.

This is intentionally cross-account aware. IRA purchases are not themselves tax-loss harvest candidates, but replacement buys in IRA or other linked accounts can still matter for wash-sale warnings.

Guardrails

CheckScopeBehavior

Harvestable accountTaxable brokerage subtypes onlyRetirement, HSA, education, and unknown accounts are excluded as sale candidates.

Wash-sale window30 days before and 30 days after the reference sale dateRecent or scheduled replacement buys for the same ticker suppress the user-facing suggestion.

Cross-account relevanceAll linked accounts for the same userIRA and other non-taxable buys are not harvestable sales, but they can still matter for wash-sale warnings.

Substitute screeningFactor-neutral alternativesSubstitutes exclude the same ticker and conservative same-index ETF matches.

Known Limitations

Midas Edge does not optimize tax lots, allocate disallowed losses, or prepare tax filings.
The realized gains in the year-end plan are a first-in, first-out estimate from the transactions on record, in taxable accounts and US dollars only. A broker's lot method can differ, dates are the broker's posting dates, wash sales are matched within an account, and shares sold with no purchase on record are left out. The broker's realized gain/loss report is the figure to use at tax time.
Plaid transaction feeds may not expose standing buy orders, spouse accounts, or accounts outside the user's linked institutions.
The app uses conservative suppression when current linked-account data shows wash-sale risk; users should confirm details with their brokerage and tax professional.

What runs behind this

The opportunity scan, wash-sale suppression and substitute filters
Each account's tax treatment, and when an IRA trade matters
What each plan can see

Last updated: Apr 2026← Back to Methodology Overview