Configure optimization for the proposal you need

Start with the outcome you want for the account: harvest losses, reduce a concentrated position, or raise cash. Then check whether the account’s settings require trades that conflict with that outcome. For example, a loss-harvesting proposal can sell appreciated holdings because an exposure limit requires it. Raising Tax sensitivity will not remove that requirement. Identify what is driving the sale before changing how much weight the optimizer gives taxes. The examples below use simplified portfolios to show how a setting can change the proposal and what you give up in return. Dollar figures are rounded.

​

Leave room for tax-loss harvesting

A tight factor bound can require selling appreciated holdings even when your priority is harvesting losses. Consider a simplified $1 million portfolio. With the same holdings and tax settings, both configurations harvest $80,000 of losses: Selling the loss position changes the portfolio’s factor exposure. Under the tighter bound, the optimizer also sells part of an appreciated holding to bring exposure within range. The wider bound lets it keep that holding, accepting more exposure deviation in return. The choice is whether closer exposure matching justifies the additional gains. Where the mandate allows flexibility, compare a wider bound before increasing Tax sensitivity: a stronger tax preference cannot override a required exposure limit. Open Setup → Settings → Constraints to review Factor exposure bounds, including inherited values. Position caps and No-hold tickers can also require gain-realizing sales, so check those alongside factor bounds.

​

A loss position stays in the portfolio

A no-trade restriction preserves a position, including when selling it could harvest a loss. Return to the $1 million portfolio above with the wider factor bound. One holding is worth $400,000 against a cost basis of $480,000. Compare keeping its no-trade restriction with allowing it to trade: Keeping the restriction preserves the original holding. Allowing the trade makes the loss available, but replaces that investment and changes the portfolio’s exposure. Remove an optional restriction only when its reason no longer applies; an unrealized loss alone does not make it appropriate to sell. Check No-trade tickers, including restrictions inherited from the model and firm. If both no-hold and no-trade apply, no-trade takes precedence. Wash-sale restrictions and replacement eligibility still matter after a no-trade restriction is removed. Tax-aware management explains those checks and the limits of the tax estimate.

​

A transition needs more turnover than the limit allows

A lower Turnover limit can spread a transition across proposals, leaving more of the original position in place. Consider a $1 million account with a $100,000 holding you want to reduce to $50,000 and reinvest in a replacement. The holding has a $90,000 cost basis; the rest of the account stays unchanged. The limit counts purchases and sales, excluding the cash residual. Selling $25,000 and buying $25,000 uses the full 5% allowance. The lower limit realizes fewer gains now but leaves the transition incomplete; the higher limit allows the account to reach its target in this example. Decide whether the account can move in stages. If another constraint requires the whole change now, the smaller allowance may leave no feasible solution. How optimization makes tradeoffs explains the turnover measure and trading costs.

​

A cash setting causes more sales than expected

A larger cash reserve provides more available cash, but can require more sales to fund it. Consider a $1 million account with $5,000 already in USD cash. You set a USD cash amount of $10,000. Compare that amount on its own with keeping a 2% USD cash buffer as well: Tilt uses the larger reserve implied by the percentage and the amount. Keeping the 2% buffer reserves another $10,000, which requires another $10,000 of net sales if there are no other cash flows, before fees. Those sales may realize gains depending on which lots are sold. Check both fields under Setup → Settings → Optimization. If the reserve is larger than intended, correct it before increasing tax sensitivity to discourage sales. If the cash is required, review the gains and exposure changes as part of funding it.

​

Compare the whole proposal before choosing settings

Use an account-specific comparison before changing a shared model or firm setting:

1. Record the current effective settings and proposal results. Check each setting’s source and any matching rules in Setup.
2. Change one relevant setting, apply it, and generate a new proposal from Optimization → Optimize. Keep the other inputs consistent so you can assess its effect.
3. Compare the resulting trades and holdings, including estimated gains and losses, cash, turnover, and exposure deviation. Choose the configuration against the account’s mandate, rather than a single favorable metric.

In the factor-bound example, looking only at losses harvested shows a tie at $80,000. Including gains reveals net realized losses of $45,000 versus $80,000, while the exposure comparison shows what the wider bound gives up. Read those outcomes together before choosing the configuration. Review a rebalance covers proposal review. Settings and rules explains inherited values and conditional settings. Reports and backtests explains the available estimates and their limits.

---

See IRS Publication 550 for U.S. wash-sale rules.