A year ago or so, I opened a managed brokerage account that is supposed to be tax conscious. Essentially, this means that it is harvesting losses. The account is up modestly, but it is recognizing taxable losses. I carried forward most of these losses from 2024 and its recognizing more losses in 2025.

Most of my market exposure is in tax deferred accounts, so I am not generating taxable gains to offset these losses.

I do hold a decent amount of cash that I invest in cash equivalent accounts. These account produce dividends which you can't offset with your losses. Is there a cash equivalent type ETF or fund that will reinvest dividends so that your market value increases vs paying dividends?

Can you ask the manager of your account to realize some of the gains in the account? They can just sell a security and debit it without any wash sale concern since it's a gain.

If you are still working and in the marginal bracket of 22% or higher you get more value rolling it and taking 3k of ordinary income off your taxes, but the value of a carry over loss does go down with inflation so I understand why you would want to wash some of it out.

I am still sitting on a large capital loss from 2022 that I am starting to work down via selling VOO and instantly rebuying it. Doing this raises my cost basis (lowers unrealized gains) and helps erase my carry over capital loss.

Yes, I could have them harvest some gains and increase my cost basis. However, I would really like to convert $15-20k of interest to short term gains to offset these losses.

BOXX is the etf you're looking for. Basically mimics money market yields but doesn't (generally) pay a dividend and increases share price slow and steady. There is some controversy whether the irs may eventually say it doesn't qualify for lt cap gains but I've had most of my cash in that for the past 18 months or so.

I was unaware of this strategy before this thread and since I am also sitting on a lot of carry over capital losses I have done more reading on it

There is some debate about the BOXX ETF but most of it is coming from concerns about converting interest gains into long term capital gains which are taxed at a different rate. When it comes to offsetting capital losses it's less of a controversial issue.

That being said I don't want to draw the IRS attention so I am doing something similar now and taking the money I would put into a tbill into the etf VBIL on the first trading day of the month and setting up a sell order on the last day of the month to capture the appreciation before the dividend is issues with the plan to repurchase the next trading day after the dividend is paid (and the price is reduced to reflect that).

This appears to be more on the up and up than the BOXX strategy since I will be realizing short term gains and not potentially long term gains which someone could convincably do buying into BOXX.

Some dividends are return of capital and not subject to capital gains. Unfortunately you won't know that number for sure until next year when they report it to you.

If you really want tax free dividends consider a muni bond ETF.

https://etfdb.com/etfdb-category/national-munis/

The strategy is to convert interest returns into short term capital gains that are offset by carry over capital losses from tax loss harvesting. This lowers your taxable income and allows you to, for example, do a larger Roth conversion at a lower tax rate.

I.e. if you had 20k in capital loss carry over you are limited to only covering 3k of ordinary income with that loss and then have to keep rolling the remaining. Basically over time the value of your capital loss is reduced due to inflation. If this same person also had 100k in a money market earning 4k a year in interest, they could use the BOXX or VBIL strategy (selling before a dividend) to basically earn $4000 in capital gains rather than 4k in interest. Since that gain was earned as a capital gain you could cancel it out with the capital loss carry over, something you couldn't do if you had $4k in interest.