Method and apparatus for tax efficient investment management

Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance

Reexamination Certificate

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C705S037000

Reexamination Certificate

active

07031937

ABSTRACT:
A method and apparatus for automatically managing investment portfolios is disclosed which substantially tracks a selected index and automatically harvests tax losses. The system includes an accounting system for maintaining tax lot information for individual accounts, an optimization system for rebalancing each account to substantially model the index and for harvesting tax losses, and a trading system for executing trades. Each investor owns the securities in his/her account, and therefore, harvested losses can be used to offset capital gains. Securities sold to harvest tax losses are repurchased at a later time selected to avoid application of the Internal Revenue Service wash sale rules, with exchange traded funds (ETF's) from the same technological sector as the securities being sold to harvest tax losses being used as temporary replacement securities for the portfolios.

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