How to use this calculator
- Enter the inputs using consistent units.
- Review rate, timing, and scope assumptions.
- Select Calculate to update every result.
- Change one assumption at a time to compare scenarios.
#3305 · Finance Tool
Tax Loss Harvesting Break-Even Age Calculator
Estimate the age at which the reinvested tax benefit from a harvested loss catches up with future tax and implementation costs. The result converts a break-even holding period into an age and shows the required growth threshold.
Calculator
Enter assumptionsFormula
Years = ln[(loss × future rate + costs) ÷ (loss × current rate)] ÷ ln(1 + return)
If the starting benefit already covers the target, break-even is immediate.
What the result means
Break-even age is a scenario result, not a required holding age. It isolates growth on the current tax benefit against modeled future tax and costs.
This is an educational estimate, not tax, legal, or investment advice. Tax rules, eligibility, account ordering, and state treatment vary; confirm decisions with a qualified professional.
Example calculation
At age 45, a $10,000 loss and 30% rate create $3,000 of benefit. Future tax plus cost is $2,100, so the modeled strategy is already beyond break-even at age 45.
Tips for better results
- Keep units consistent from input through result.
- Use unrounded values during the calculation and round only the displayed result.
- Run a conservative and an optimistic scenario before acting.
- Document assumptions so the estimate can be reproduced.
Frequently asked questions
Why can break-even be immediate?
The current tax benefit may already exceed the modeled future tax and implementation cost.
What if the assumed return is zero?
A finite growth-based break-even cannot be calculated unless the starting benefit already covers the target.
Does break-even age include portfolio value?
No. It compares only the harvesting benefit with deferred tax and cost.
Should I use my federal rate or combined rate?
Use the marginal rate that realistically applies to the loss offset, including state treatment if relevant.
Does a later sale date always improve the result?
In this simplified model, more time compounds the tax benefit, but real replacement performance and tax rules can differ.
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Break-even assumptions
| Input | Role |
|---|---|
| Current tax rate | Creates the starting benefit |
| Future tax rate | Creates the deferred-tax target |
| Return | Compounds the starting benefit |