onboarding

Tax Strategy — your first harvest run, end to end

Worked example: find a losing ETH lot, pick WSTETH as the replacement, save the audit trail

6 min · beginner

What you'll have when finished

  • A live Harvest scan with your real tax rate dialed in
  • Understand the three tabs (Harvest / What-If / My Lots) and when each one is the right answer
  • Pick a conservative replacement that maintains exposure without being substantially identical
  • Save the disclosure block as part of your audit trail

Before you start

  • Not tax advice. Run all output past a CPA before acting on harvest suggestions.
  • Wash-sale rules vary by jurisdiction (US ~30 days, UK 30 days, Australia 12 months, most EU has no formal rule). The replacement map assumes conservative US-style treatment.
  • Volatile-quote pairs (ETH/BTC etc.) are excluded from the lot ledger. We refuse to invent historical USD basis. Coming post-launch.

Walkthrough

  1. Open Tax Strategy → My Lots first (always)

    Before looking at Harvest opportunities, look at WHAT YOU OWN. Navigate to **Intelligence → Tax Strategy → My Lots**. The 4 cards at top show: - **Open Cost Basis** — what you originally paid for everything currently held (sum across all open lots) - **Open Market Value** — what those same holdings are worth right now - **Unrealized P&L** — paper gain or loss (green if up, red if down) - **Realized P&L** — gains/losses from closed positions in the current tax year Below: a table of every open lot — asset, qty, basis, current value, unrealized P&L, open date. **Read this first** because it answers "do I even have harvestable losses?" If Unrealized P&L is green and your holdings are all profitable, the Harvest tab will be empty — that's the right answer, not a bug.

    Success criteria: Read all 4 summary cards · Identified at least 1 lot at a loss (if any)

  2. Switch to the Harvest tab and set your tax rate

    Click the **Tax-Loss Harvest** tab. Drag the **Effective tax rate** slider to your real number. Quick guidance for US filers: - **Federal long-term capital gains** — 0% / 15% / 20% depending on income - **Federal short-term** — your ordinary income rate (typically 22-32% for middle bracket) - **State** — adds 0% (TX/FL/NV) to ~13% (CA) A common middle bracket number is around 30%. If you're high-income California, more like 37%. If you're long-term gains in a no-tax state, more like 15%. Non-US: estimate your local combined marginal rate for crypto gains. Drag the **Min harvest amount** slider to $25 (default) or higher. This hides trivial opportunities where fees would eat the savings.

    Success criteria: Tax rate dialed in · Min harvest amount set

  3. Read your first opportunity card

    Each opportunity card shows: - **Asset** + **lot term** badge (short-term vs long-term) - **Open date** (when you originally bought it) - **Holding** — qty held + cost basis + current market value - **Loss amount** (the big red number) — what selling now would realize as a loss - **Estimated savings** (the green number) — your tax rate × the loss **Worked example:** suppose you have a 0.5 ETH lot bought at $4000 (cost basis $2000), now worth $1500. Loss = $500. At a 30% tax rate, estimated savings = $150. This card tells you: "selling this lot today realizes a $500 loss that reduces your taxable gains by $500, saving you ~$150 in taxes — provided you have $500 of other gains to offset."

    Success criteria: Identified the loss + savings on at least one card · Understood short-term vs long-term

  4. Pick a replacement to maintain exposure

    Each opportunity shows 1-3 **Suggested replacements** — conservative tokens that maintain similar economic exposure WITHOUT being substantially identical. Examples from the curated map: - **ETH → WSTETH** (Lido-staked ETH wrapper, distinct issuer) - **BTC → WBTC** (BridgeDAO-issued bitcoin proxy) - **SOL → MSOL** (Marinade-staked SOL) - **MATIC → STMATIC** (Lido-staked MATIC) **Why not just buy back ETH after 31 days?** That works if you can tolerate being out of the position for 30 days. The replacement approach keeps you exposed throughout, which matters when prices can move 30% in a month. **Why "conservative" replacements?** IRS has not formally extended wash-sale to crypto, but conservative practitioners treat it as if they did. Substituting WSTETH for ETH is meaningfully different (you're now holding a wrapped staked derivative with smart contract risk) — clearly not "substantially identical."

    Success criteria: Picked one replacement that makes sense for your view

  5. Execute the swap manually

    haythix does NOT auto-execute harvest trades. This is engine-enforced, not a UI choice. To execute: 1. Note the lot details (asset, qty, current value) 2. Open **DEX Swap** (or CEX Trading if you prefer the CEX side) 3. Sell the original asset, buy the replacement 4. Confirm both legs filled Two real fills now exist — one realizes the loss, one opens a new lot at the current price. The lot ledger updates automatically on next refresh. **Why manual?** Tax decisions deserve human review. An auto-harvester triggered by a price drop could execute against your strategic plan or fire during a flash crash. Human-in-the-loop is the right default here.

    Success criteria: Both legs filled · Lot ledger refreshed to show the realized loss

  6. Save the disclosure block for your records

    Print or screenshot the Harvest tab BEFORE executing. The amber disclosure card at the top includes: - **Tax-rate assumption** (your slider setting) - **Replacement caveat** (the wash-sale framing) - **Execution caveat** (manual-only, not auto) This is part of an audit trail. If your CPA asks "why did you sell ETH and buy WSTETH on the same day?" you can show them this exact disclosure block from the day you made the decision. For larger lots (>$10k loss), consider a brief written memo: "Decision date, lot ID, loss amount, replacement chosen, rationale." Costs nothing, protects everything if audited.

    Success criteria: Saved or screenshotted the disclosure block

  7. Use What-If to verify the post-harvest portfolio

    Switch to the **What-If Scenarios** tab. Enter your CURRENT portfolio in the left editor, and the POST-HARVEST portfolio (with the replacement in place) on the right. Pick a **90-day lookback** to start. Click **Compute scenario**. The side-by-side metrics show whether your tax-driven swap is also a risk-acceptable swap: - **Annualized return** — proposed higher = same upside or better - **Annualized volatility** — proposed lower = less risky - **Sharpe ratio** — proposed higher = better risk-adjusted - **Max drawdown** — proposed lower (less negative) = smaller worst case - **VaR 95% daily** — proposed less negative = smaller typical bad-day **If post-harvest portfolio has worse Sharpe AND higher drawdown, the tax savings might not be worth the risk shift.** Consider a different replacement or a different lot to harvest.

    Success criteria: Computed What-If on your current vs post-harvest portfolio · Verified risk metrics are acceptable

What's next

Most users converge to this routine: **Monthly (10 min):** open Tax Strategy → My Lots, eyeball the unrealized P&L. If anything is down >$100, decide whether to harvest now or wait. **Quarterly (30 min):** run Harvest with your current tax rate. Execute any opportunities >$100 estimated savings. Save the disclosure block. Run What-If on the result to verify portfolio metrics. **December (60 min):** the BIG one. Harvest aggressively in the final 2 weeks to offset realized gains earlier in the year. Most retail investors miss this window. Don't. **Just before filing (30 min):** open [Tax Report](/tax-report) to see the FIFO/LIFO/HIFO summary. Compare against your CPA's draft. Reconcile any discrepancies. See also: [[tax-loss-harvest-without-imputed-prices]] (the intermediate guide with replacement-map deep dive).