liveBook · Manning

MinTaxObjective

As explained in Build a Robo-Advisor with Python (From Scratch)

MinTaxObjective is a book-specific optimization objective that selects trades to minimize their total tax cost.

MinTaxObjective is an optimization objective for portfolio rebalancing that minimizes the total tax consequence of sales. Selling loss lots contributes negative tax, allowing strategic loss realization to reduce the objective. section 13.3.2

Lot-level tax inputs

A holdings table can provide ticker, purchase price, quantity, purchase date, current price, and value for each tax lot; the objective uses purchase dates to calculate holding periods.

How Build a Robo-Advisor with Python (From Scratch) covers it

How deep it goes
Implements a configurable Python objective using sale variables, holding periods, and tax rates; it stops short of broader tax strategy.
Examples
Uses multi-lot VTI and AGG holdings with purchase dates, prices, quantities, current prices, and values.
What it assumes
Assumes portfolio holdings, sale variables, purchase dates, and basic Python data handling; defines the objective interface explicitly.
What you can do after
Build it from scratch by configuring rates and implementing generate_objective for portfolio holdings and sale variables.
How it connects
Connects portfolio rebalancing, tax-loss harvesting, investment constraints, and tracking error.
Cover of Build a Robo-Advisor with Python (From Scratch)
liveBookmanning.com
Read Build a Robo-Advisor with Python (From Scratch) on liveBook Get the book at manning.com

This explainer was generated by Manning's knowledge graph from the text of Build a Robo-Advisor with Python (From Scratch). The section links point to the parts of the book it draws on.