Rebalancing Plan Generator

Produce a concrete, sequenced rebalancing plan that converts diagnostic findings into specific trades with tax awareness and execution timing.

Required Input

• Current holdings (ticker, shares, value, cost basis, gain/loss)
• Account types (taxable, Roth IRA, Traditional IRA, 401k)
• Target allocation or investment thesis (if available)
• Any constraints (e.g., "don't sell NVDA", wash sale concerns, pending activity)

If a portfolio health check was already run, use those findings as input.

Plan Generation Process

Step 1: Classify Every Position

Assign each position one action:

• HOLD: Aligned with thesis, appropriate size
• TRIM: Aligned but oversized — sell partial
• SELL: Not aligned, dead weight, or tax-loss candidate
• BUY: New position needed to fill gap
• SWAP: Replace with better alternative in same category

Step 2: Sequence for Tax Efficiency

Read references/tax-aware-sequencing.md for detailed rules.

Order of operations matters enormously for tax impact:

1. Sell losers first — harvest tax losses before realizing gains
2. Trim winners in tax-advantaged accounts — no tax impact in Roth/IRA
3. Trim winners in taxable accounts — offset with harvested losses
4. Buy new positions — deploy freed capital
5. Build cash reserve — if below target

Step 3: Size Each Trade

For sells/trims:

• Calculate exact shares to sell
• Estimate proceeds
• Estimate tax impact (short-term vs long-term capital gains/losses)
• Flag wash sale risk if buying similar replacement

For buys:

• Calculate target dollar amount
• Suggest share count at current prices
• Assign priority (P0 = critical, P1 = high, P2 = medium, P3 = nice-to-have)

Step 4: Create DCA Timeline

Spread execution over 4-8 weeks to reduce timing risk. Group trades into weekly batches with dependencies:

• Week 1: All sells (generate cash + tax losses)
• Week 2-3: Trims + high-priority buys
• Week 4-6: Remaining buys (DCA into positions)
• Week 7-8: Review, adjust, rebalance remaining

Step 5: Generate Output

Produce TWO outputs:

1. Summary table (for quick reference):

| Step | Action | Ticker | Shares | Est. Value | Tax Impact | Week |

2. Detailed spreadsheet (for execution): Use the xlsx skill to create a professional Excel workbook with tabs:

• Current Holdings (with health flags)
• Sell/Trim Orders (with tax estimates)
• Buy Orders (with priority and DCA schedule)
• Target Allocation (post-rebalancing snapshot)
• Tax Impact Summary
• Execution Timeline

Wash Sale Rules

Critical: Do NOT recommend selling a stock at a loss and buying a "substantially identical" security within 30 days before or after the sale. Flag these risks explicitly:

• Selling VTI and buying VOO within 30 days = wash sale risk
• Selling ARKK and buying individual ARKK holdings = generally NOT a wash sale
• Selling a stock in taxable and buying same stock in Roth within 30 days = wash sale

Profile Integration

Before starting analysis, check for the user's financial profile:

1. Read profile/financial-identity.md for tax bracket (affects sell sequencing)
2. Read profile/holdings.md for full holdings, account types, and cost basis data

If profile exists:

• Use stored holdings as baseline
• Incorporate user's known tax situation into sequencing recommendations
• Avoid re-requesting account structure data

If profile doesn't exist or is incomplete, proceed normally and offer to save:

• Current holdings with account types and cost basis
• Target allocation (if user defines one)
• Realized/unrealized gains summary for tax planning

After completing analysis, append a summary to profile/history.md:

## [Date] — Rebalancing Plan
- **Action**: [Reason for rebalancing - portfolio health finding, drift from target, etc.]
- **Key findings**: [Current allocation issues, tax impact estimate, number of trades proposed]
- **Recommendations**: [Execution timeline, biggest tax-saving moves, highest-priority trades]

Important Notes

• Frame all output as analytical options, not financial advice
• Always flag positions with >$10k unrealized gains as "high tax impact — review with advisor"
• If total portfolio exceeds $250k, add note: "Consider consulting a fee-only fiduciary advisor for tax-optimized execution"
• Include disclaimer at the end of every plan