Tax-loss harvesting is a strategy where investors sell investments that have decreased in value to realize, or "harvest," a capital loss for tax purposes. By doing this, the investor can offset capital gains from other investments or reduce their taxable income. After selling the losing investment, the investor might then buy a similar (but not substantially identical, to avoid the wash sale rule, see below) investment to maintain their portfolio's balance. This approach allows the investor to potentially lower their tax bill while keeping their investment strategy largely intact.

A wash sale occurs when an investor sells a security at a loss and then repurchases the same or substantially identical security within 30 days before or after the sale. Imagine you bought a stock for $10, and then its value dropped to $5, so you decide to sell it at a loss. But soon after, you buy the same stock again because you believe its value will go up. The government says you can't claim the loss from selling your stock to reduce your taxes if you buy the same or a very similar stock within 30 days before or after the sale. This rule makes sure people don't sell investments just to get a tax benefit and then quickly buy them back. Arta closely monitors for wash sales to make sure all the capital losses generated can be applied to offset gains.

At year end, you will receive a tax statement from Arta’s partner BNY | Pershing and that you can use to easily file your tax returns. Harvested losses appear on Schedule D of your tax return, where they offset any capital gains without any limits. In addition, any excess losses can reduce your taxable income by up to $3,000, potentially decreasing your tax bill or increasing your refund.

At year end, you will receive a tax statement from Arta’s custodian and broker BNY | Pershing that you can use to easily file your tax returns. Contrary to common belief, you will not have to enter losses from each transaction - there’s only one number to enter into your tax return.

Harvested losses that you can't match up with capital gains don't disappear. You can apply up to $3,000 of these losses against your regular income each year. And if you're still left with unused losses, they're not wasted. They carry over into future years, ready to offset future gains or income. This mechanism serves as a tax-saving tool, offering a way to lessen your tax burden over time. There is no time or amount limit on how much loss you can carry into the future.