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)

pythonCopy code
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:

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:

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:

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:

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:

Step 6: Implementation Plan

Step-by-step plan:

Step 7: Document for Tax Filing

Required documentation:

Step 8: Year-End Checklist

Year-end TLH checklist:

China-Specific TLH Considerations

Current Tax Environment

When TLH Makes Sense in China

A-share Market Timing

TLH for Different Client Types

Individual Investors

Institutional Investors

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