Reducing the current tax liabilities on your investments can help enhance your overall returns. Implementing our Tax Management Services in a taxable managed investment portfolio, known as a Unified Managed Account (UMA), seeks to offer you professional and tax-efficient portfolio management to help meet your unique financial goals.
Tax Management Services
A strategy to keep more of your returns with a tax-managed investment portfolio.
Improving After-Tax Returns
We have made it simple to integrate tax-minimizing strategies to help enhance the net performance of your portfolio — because the returns you keep are the ones that count.
Tax-Efficient Trading
The Tax Management portfolio manager of your Select UMA account uses an efficient “best tax outcome” methodology that attempts to minimize capital gains and/or maximize tax losses when selling down a position with multiple lots.
Account-Level Rebalancing
We automatically rebalance your account if your holdings drift from your desired asset allocation.
Active Tax Loss Harvesting
Unlike the traditional method of harvesting losses toward the year-end, a Select UMA Tax Managed account is reviewed on a more frequent basis throughout the year. If your Select UMA Tax Managed account has a net realized gain at the time an active tax loss opportunity is identified, Tax Management will attempt to offset the gain by selling positions that are currently held at a loss. This allows the account to take advantage of market movements throughout the year.
Opportunistic Tax Loss Harvesting
Market volatility can work in your favor. Your Tax Managed account is monitored daily for opportunities to harvest tax losses and take advantage of dips and dislocations throughout the year. This active approach allows you to focus on your investments, without missing an opportunity to harvest tax loss.
Client-Directed Tax Mandates
You have the option to set a limit on the total amount of net gains you wish to realize each year, or the total amount of capital gains tax liability you are willing to incur within your Select UMA account. When your realized gains reach the amount you set, we prevent any sales in your account that would further increase your gains.
Certain Wash Sale Adherences
When a stock, ETF or mutual fund is sold for a loss, under the wash sale rules, that loss may not be currently usable if the same or substantially identical security is purchased within 30 days of the sale that generated the loss. We attempt to protect that loss by blocking repurchases of the security in your Select UMA account for 30 days, and it’s only bought back 31 days after the sale.
Tax Solutions for You
Speak to your Financial Advisor about how seeking tax efficiencies may help you achieve your goals faster.
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Disclosures
Clients may elect Tax Management Services for an account by notifying their Financial Advisor, and indicating what Maximum Tax or Realized Capital Gain Instruction is desired for an account, if any. The Tax Management Terms and Conditions attached to the Morgan Stanley Smith Barney LLC Select UMA ADV Brochure as Exhibit A will govern Tax Management Services in the account. Review the Morgan Stanley Smith Barney LLC Select UMA ADV Brochure carefully with your tax advisor. Tax Management Services are not available for all accounts or clients and may adversely impact account performance. Tax Management Services do not constitute tax advice or a complete tax-sensitive investment management program. There is no guarantee that Tax Management Services will produce the desired tax results.
* Mutual funds reviewed for tax-loss harvest opportunity only during the fourth quarter tax-loss process. MLP securities for which a Schedule K-1 Tax Report is generated are excluded from quarterly systematic tax-loss harvest processes.
** Eligible and available securities include securities that are both IRS Wash Rule eligible and above the minimum tax-loss thresholds as described in the Select UMA ADV Brochure. See Exhibit A: Tax Management Services Terms & Conditions.
*** Morgan Stanley and the Select UMA Tax Management Service do not guarantee adherence to the IRS Wash Sale Rule.
Morgan Stanley Smith Barney LLC, its affiliates and its employees are not in the business of providing tax or legal advice. Investors should seek advice based on their own particular circumstances from an independent tax advisor. The performance of tax-managed accounts is likely to vary from that of nontax-managed accounts.
Investing in the markets entails the risk of market volatility. The value of all types of securities, including mutual funds and exchange-traded funds, may increase or decrease over varying time periods.
Morgan Stanley Smith Barney LLC offers investment program services through a variety of investment programs, which are opened pursuant to written client agreements. Each program offers investment managers, funds and features that are not available in other programs; conversely, some investment managers, funds or investment strategies may be available in more than one program.
Please see the Morgan Stanley Smith Barney LLC Select UMA ADV brochure for more information on the Select UMA program. Ask your Financial Advisor for a copy or click here: www.morganstanley.com/ADV.
Select UMA® is a registered service mark of Morgan Stanley Smith Barney LLC.
CRC# 5329070 (12/2022)