China Tax Loss Harvesting

china-tax-loss-harvesting

Purpose

Implement A股税务亏损抵扣 — systematic tax-loss harvesting for Chinese investment portfolios.

Data Sources

Primary: iFind MCP (Tier-1 付费) / AkShare MCP (Tier-2 免费备选)

get_quote(ticker)                     → Current prices for holdings
get_historical_data(ticker)           → Cost basis / purchase history

Secondary Sources

• Broker records — cost basis, trade history
• Tax filings — prior year losses
• 交易所 — tax treatment rules

Workflow

Step 1: Identify Tax-Loss Positions

Loss identification:

| Position | Ticker | Cost Basis | Current Value | Unrealized Loss | Loss % | |----------|--------|-----------|--------------|-----------------|--------| | | | ¥XX | ¥XX | ¥XX | X% |

Loss screening criteria:

• Unrealized loss > 10% of cost basis
• Loss amount significant relative to portfolio
• Holding period appropriate for tax treatment

Step 2: Understand A-share Tax Rules

China tax treatment for securities:

| Item | Tax Rate | Notes | |------|----------|-------| | 证券买卖价差 | 暂免 (temporarily exempt) | Capital gains on stocks | | 股息红利 | 20% (持股>1年减半至10%, >1年免征) | Dividend tax | | 基金分红 | 暂免 (some funds) | Fund distributions | | 买卖印花税 | 0.05% (seller only) | Stamp duty | | 证券交易佣金 | 0.02-0.03% | Commission |

Current status of capital gains tax:

• Individuals: Capital gains on stocks are currently temporarily exempt (暂免征收)
• However, losses can be used to offset gains within the same year
• Loss carryforward rules may apply

Step 3: Calculate Tax Benefit

Tax benefit calculation:

| Scenario | Gain | Loss | Taxable Gain | Tax Saved | |----------|------|------|--------------|-----------| | Without TLH | ¥XX | — | ¥XX | — | | With TLH | ¥XX | ¥XX | ¥XX | ¥XX | | Benefit | | | | ¥XX |

Note: In the current A-share environment where capital gains are largely exempt, tax-loss harvesting benefits may be limited. However:

• Harvesting losses can be valuable if tax rules change
• Offsetting gains within the same year
• Potential future tax benefit if capital gains tax is introduced

Step 4: Identify Replacement Securities

Replacement criteria:

| Criterion | Requirement | |-----------|-------------| | Same sector | Similar industry exposure | | Similar characteristics | Market cap, growth, quality | | Not substantially identical | Avoid wash sale rules | | Tax-efficient | Consider dividend treatment |

Wash sale considerations (China):

• No explicit wash sale rule currently
• However, substantially identical securities may be disallowed
• Best practice: 30-day waiting period

Step 5: Execution Strategy

Execution options:

| Strategy | Description | Pros | Cons | |----------|-------------|------|------| | Full exit | Sell and replace | Clean loss realization | Market risk | | Partial exit | Reduce position | Partial benefit | Partial benefit only | | Swap | Sell loss, buy similar | Maintain exposure | Timing risk | | Delay | Wait for recovery | No transaction costs | Missed opportunity |

Step 6: Implementation Plan

Step-by-step plan:

| Step | Action | Timing | |------|--------|--------| | 1 | Identify loss positions | Pre-year-end | | 2 | Evaluate replacement options | Pre-year-end | | 3 | Check wash sale rules | Pre-year-end | | 4 | Execute sales | Before year-end | | 5 | Execute purchases | After sale (or simultaneously) | | 6 | Document transactions | Immediately | | 7 | File tax forms | Tax filing deadline |

Step 7: Document for Tax Filing

Required documentation:

| Document | Content | |----------|---------| | Trade confirmations | Sale and purchase tickets | | Cost basis records | Purchase prices, dates | | Loss calculations | Realized loss amounts | | Replacement securities | Identified alternatives | | Market rationale | Investment thesis |

Step 8: Year-End Checklist

Year-end TLH checklist:

| Date | Action | |------|--------| | Nov | Review portfolio for loss positions | | Dec 1-15 | Identify replacement securities | | Dec 15-20 | Execute loss sales | | Dec 20-31 | Execute replacements | | Dec 31 | Final portfolio review | | Jan | File tax documentation |

China-Specific TLH Considerations

Current Tax Environment

| Factor | Status | Implication | |--------|--------|-------------| | 资本利得税 | 暂免 (temporarily exempt) | Limited current benefit | | 印花税 | 0.05% | Cost on sale | | 股息红利税 | 20% (10% for >1yr) | Consider in replacement | | 交易佣金 | 0.02-0.03% | Trading cost |

When TLH Makes Sense in China

| Scenario | Benefit | |----------|---------| | Offset short-term gains | Use losses against gains | | Reset cost basis | Lower future gains if taxed | | Prepare for tax changes | If capital gains taxed in future | | Portfolio rebalancing | Combine with rebalancing |

A-share Market Timing

| Consideration | Guidance | |--------------|----------| | 年末效应 | Year-end selling pressure | | 涨跌停限制 | May prevent execution | | 流动性 | Ensure liquidity for exit | | 政策窗口 | Tax policy change risk |

TLH for Different Client Types

Individual Investors

| Consideration | Guidance | |---------------|----------| | 持股期限 | >1 year for dividend tax benefit | | 高频交易 | May trigger scrutiny | | 金额门槛 | Focus on significant positions |

Institutional Investors

| Consideration | Guidance | |---------------|----------| | 交易成本 | Factor in commission impact | | 市场冲击 | Large position impact | | 会计处理 | NAV impact timing | | 合规审查 | Documentation requirements |

Quality Checks

Before executing:

• [ ] Loss positions identified
• [ ] Tax benefit calculated
• [ ] Replacement securities identified
• [ ] Wash sale rules considered
• [ ] Execution plan clear
• [ ] Documentation prepared
• [ ] Timing appropriate

> Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference. > - ifind-only (strict): Use iFind only, error if unavailable > - ifind-fallback (default): iFind preferred, fallback to AkShare > - akshare-only, wind-only (Wind only), wind-fallback (Wind first, fallback to iFind → AkShare): Skip iFind, use AkShare only

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: jwangkun
• Source: jwangkun/claude-for-financial-services-cn
• License: Apache-2.0

Install and usage instructions live in the source repository linked above.