A maturing account has not stopped working. It has converted years of harvesting into two assets that are easy to overlook.

The first is a capital-loss carryforward. When realized losses exceed realized gains in a given year, you can apply up to $3,000 of the excess against ordinary income ($1,500 if married filing separately), and any remainder carries forward to future years with no expiration. Against capital gains there is no annual cap at all; a loss carryforward can offset an unlimited amount of realized gain. Years of disciplined harvesting can build a sizable reserve of these losses, sitting on your return waiting to be used. Character matters too: short-term losses offset short-term gains first, and because short-term gains are taxed at higher ordinary rates, that is where the losses do the most good.

The second asset is the low cost basis itself. Every lot that appreciated and was never sold now carries a built-in gain. Viewed narrowly, that is a future tax liability. Viewed correctly, it is the natural consequence of deferral, and letting gains compound untaxed is one of the quieter engines of after-tax return. The account has traded its supply of losses for a stock of deferred gains and a bank of carryforwards. The question is how to use them.

Once the losses thin out, the measure of a well-run account stops being how much was harvested this year and becomes how efficiently the gains are managed. A few principles guide that shift.

If the portfolio needs to be trimmed, to rebalance, to fund a purchase, or to reduce a position that has grown oversized, realizing gains while a loss carryforward is available can make those sales close to tax-neutral. The reserve you built during the harvesting years is precisely what lets you reshape the portfolio later without a large tax bill.

When you do need to raise cash, identifying the specific lots with the smallest embedded gain, rather than letting the custodian default to first-in, first-out, keeps realized gains to a minimum. This is mechanical, but across many transactions it adds up.

A seasoned account that has drifted toward a concentrated set of winners may no longer match its target allocation. Moving it back into balance is worth doing, but doing it gradually, across tax years and against available losses, is usually far better than realizing everything at once.

If you are charitably inclined, the lowest-basis lots make ideal gifts. Donating long-term appreciated stock, meaning shares held more than a year, to a public charity generally lets you deduct the full fair market value while paying no capital gains tax on the appreciation. The deduction for such gifts is capped at 30% of adjusted gross income, with a five-year carryforward for any excess. A donor-advised fund can hold the shares and let you direct grants to charities over time. One new wrinkle for 2026: itemizers can only deduct charitable contributions above a floor of 0.5% of adjusted gross income, so the timing of larger gifts matters more than it used to.

If the goal is to keep the assets in the family, holding the most-appreciated lots can be the most tax-efficient choice of all. Under current law, assets receive a step-up in basis at death, meaning the cost basis resets to fair market value as of the date of death, which can erase the embedded gain for your heirs entirely. A position you have deferred for years may be one you simply never sell. One caution worth raising with your advisor: a capital-loss carryforward does not pass to your heirs and can only be used on the final return, so a large unused reserve is a reason to put those losses to work during your lifetime.

If the goal is to keep the assets in the family, holding the most-appreciated lots can be the most tax-efficient choice of all. Under current law, assets receive a step-up in basis at death, meaning the cost basis resets to fair market value as of the date of death, which can erase the embedded gain for your heirs entirely. A position you have deferred for years may be one you simply never sell. One caution worth raising with your advisor: a capital-loss carryforward does not pass to your heirs and can only be used on the final return, so a large unused reserve is a reason to put those losses to work during your lifetime.

If your tax-managed account has gone quiet on the harvesting front, that is the moment to revisit it with your advisor, not because something went wrong, but because the most valuable decisions are now in front of you.

For the broader framework, see our discussion of tax drag and its long-term effects on your portfolio.