Tax-Loss Harvesting Multi-Agent System
## The Solution A coordinated multi-agent AI system autonomously monitors portfolios in real-time, identifies harvesting opportunities, ensures IRS compliance, optimizes replacement security selection, and calculates precise tax savings—significantly reducing advisor workload while improving accuracy..
Problem Statement
The challenge addressed
Solution Architecture
AI orchestration approach
AI Agents
Specialized autonomous agents working in coordination
Tax Orchestrator Agent
Coordinating multiple specialized agents requires complex workflow management, dependency resolution, and conflict resolution when agents produce competing recommendations.
Core Logic
The Orchestrator Agent implements an event-driven architecture using the Saga pattern for distributed workflows. It coordinates all specialist agents through pub/sub communication, resolves conflicts using priority-weighted decision making, and manages the complete tax optimization workflow lifecycle. Includes circuit breaker pattern for fault tolerance with automatic recovery.
Opportunity Scanner Agent
Manually monitoring hundreds of positions across multiple accounts for tax-loss opportunities is time-intensive and prone to missed opportunities during volatile market conditions.
Core Logic
Continuously monitors portfolio positions using streaming data pipelines with configurable loss thresholds (default -5%). Employs O(n) scanning algorithms to evaluate 200+ positions across 14+ accounts in real-time. Triggers harvest evaluations immediately when price movements exceed thresholds, ensuring no opportunity is missed during market volatility.
Compliance Guardian Agent
Wash-sale rule violations can disallow tax losses entirely. Manual compliance checking across household accounts with 30-day lookback/lookforward windows is error-prone and time-consuming.
Core Logic
Performs comprehensive wash-sale compliance analysis using O(n*m) cross-account algorithms per IRC Section 1091. Scans all household accounts across 61-day windows (30-day lookback + 30-day lookforward), identifies substantially identical securities, and validates no conflicting purchases exist. Returns safe-to-harvest dates and detailed compliance reports.
Portfolio Harmony Agent
Finding replacement securities that maintain portfolio allocation, minimize tracking error, and avoid wash-sale violations requires analyzing thousands of potential alternatives.
Core Logic
Evaluates 2,800+ securities using Pearson correlation analysis with O(n log n) complexity. Applies Modern Portfolio Theory optimization to select replacements maintaining target allocations. Considers expense ratios, tracking error, beta, and wash-sale safety. Provides ranked alternatives with 0.90+ correlation coefficients while ensuring regulatory compliance.
Impact Projector Agent
Calculating precise tax savings requires understanding federal and state brackets, capital gains treatment, loss carryforward rules, and net investment income tax implications.
Core Logic
Applies current IRS tax tables including federal brackets (up to 37%), state taxes (e.g., 13.3% CA), and NIIT (3.8%) per IRS Publication 550. Calculates immediate savings, carryforward optimization, and multi-year projections using Monte Carlo simulations. Generates executive summaries with projected annual savings.
Market Intelligence Agent
Optimal harvesting timing depends on real-time market conditions, volatility, sector performance, and economic indicators that change continuously.
Core Logic
Monitors VIX volatility index, sector performance trends, economic indicators, and news sentiment in real-time. Calculates harvesting window scores (0-100) based on market conditions, days until year-end, and opportunity urgency. Provides actionable AI insights on optimal execution timing and market impact risks.
Worker Overview
Technical specifications, architecture, and interface preview
System Overview
Technical documentation
Tech Stack
5 technologies
Architecture Diagram
System flow visualization