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Capital Gains & Holding Period Breakdown

RealizeAlpha includes a comprehensive Short-Term vs. Long-Term Capital Gains Breakdown module within the Tax Optimization suite. It enables investors to categorize open positions by holding period, track countdown timers toward preferential long-term tax rates, project tax liabilities, and receive proactive alerts before realizing gains prematurely.

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Key Features

1. Holding Period Tracking & Classification

Under IRS guidelines (IRC § 1222), assets held for more than one year (366+ days) qualify for preferential long-term capital gains tax rates, while assets held for one year or less (≤ 365 days) are taxed as short-term capital gains at ordinary income tax rates.

• Equities (InstrumentPosition): Evaluates created_at timestamp against the current date.
• Options (OptionAggregatePosition): Evaluates created_at timestamp of the option contract.
• Classification Categories:
  • shortTerm: Held for 365 days or fewer.
  • longTerm: Held for 366 days or more.
  • approaching: Short-term profitable positions within 30 days of crossing the 1-year threshold (336 to 365 days).

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2. Real-Time Holding Duration Countdown Timers

For all short-term winning positions, the interface calculates:

• Days Held: Current age of the position in calendar days.
• Days Until Long-Term: Countdown timer (366 - daysHeld) showing exact days remaining until long-term tax qualification.
• Approaching Long-Term Banner: When one or more profitable positions are within 30 days of long-term status, a prominent banner alerts the user of potential tax savings achievable by holding.

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3. Tax Liability & Potential Savings Projections

The breakdown dynamically projects tax liabilities based on user-configurable tax brackets:

• Configurable Tax Brackets:
  • Short-Term / Ordinary Income Rate: Defaults to 24% (customizable from 10% to 37%).
  • Long-Term Capital Gains Rate: Defaults to 15% (customizable: 0%, 15%, 20%).
• Tax Calculations:
  • Current Tax Liability:
    • Short-term gains: Gain × Short-Term Rate
    • Long-term gains: Gain × Long-Term Rate
    • Losses: Projected liability is $0.
  • Potential Tax Savings:
    • For short-term gains: Gain × (Short-Term Rate - Long-Term Rate)
    • Quantifies exact dollar savings if the position is held until long-term eligibility.

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4. Capital Gains Summary Dashboard

The header section provides immediate portfolio-level tax visibility:

• Net Unrealized Gains / Losses: Aggregated dollar return across all positions.
• Short-Term Unrealized: Total gain/loss and projected short-term tax liability.
• Long-Term Unrealized: Total gain/loss and projected preferential long-term tax liability.
• Total Projected Tax: Blended tax bill if all open profitable positions were liquidated today.
• Total Potential Savings: Sum of tax dollars saved if all short-term gains are held until qualifying for long-term treatment.
• Interactive Bracket Editor: Quick gear action button to update tax brackets and recalculate projections on the fly.

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5. Position Filters & Multi-Factor Sorting

The Capital Gains tab features interactive filter chips and sorting:

• Filter Chips:
  • All: Complete inventory of open positions with tax attributes.
  • Short-Term: Only positions held ≤ 365 days.
  • Long-Term: Only positions held > 365 days.
  • Approaching: Only profitable positions within 30 days of long-term eligibility.
  • Gains Only: Positions with positive unrealized profit.
• Multi-Factor Sorting:
  • Unrealized Gain / Return ($)
  • Holding Duration (Days Held)
  • Countdown Timer (Days to Long-Term)
  • Symbol (Alphabetical)

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6. Action Center Proactive Alert Integration

The suite integrates directly with PortfolioAlertService to surface high-priority insights in the portfolio Action Center:

• Alert Type: capital-gains-approaching
• Trigger: Any open position with qualifiesForLongTermSoon == true (held 336–365 days) with potential tax savings of $25 or greater.
• Actionable Notification: Informs the user of the upcoming qualification date and estimated tax savings, preventing accidental liquidation right before tax rate reduction.

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How to Access

1. Open the RealizeAlpha app.
2. Navigate to the Home tab and scroll to Portfolio Analytics.
3. Tap Tax Optimization (or the Tax Loss Harvesting card).
4. Select the Capital Gains tab (third tab alongside Loss Harvesting and Wash Sales).
5. Tap the gear icon to configure your personal federal/state tax brackets.