CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
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CLIENT: Chen Household (Sam & Alex Chen)
DATE: September 14, 2022
TIME: 2:00 PM
MEETING: 2022 Q3 Quarterly Review
LOCATION: Conference Room A, Clearwater Wealth Partners
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TRANSCRIPT
[0:00] Sarah Chen: We executed the tax-loss harvesting this week — I wanted to make
sure you heard about it directly. Markets are down again today — the August CPI
report came in hotter than expected and the S&P is off another 4% this week.
Portfolio is at $838,000. The TLH we executed is the most significant planning action
of 2022. Let me walk you through exactly what we did.
[0:04] Alex Chen: We saw the trade confirmations — I want to understand what
happened.
[0:05] Sarah Chen: Good. We swapped UECIX — your US equity core index fund — into
UECIY. UECIY tracks essentially the same index, just managed by a different firm.
Economically, your US equity exposure is unchanged. The swap happened on September
12th. The March 2022 lot of UECIX had a basis of $85 per share. We sold at $64.
That's a $21 per share loss on 1,000 shares — $21,000 of realized short-term losses.
We also swapped IDEIX into IDEIY for international — another $1,250 in realized
losses. Total: $22,250.
[0:09] Sam Chen: And that $22,250 — what does it do for us?
[0:10] Sarah Chen: Two things. First, it offsets any capital gains you have this
year. You have about $6,750 in long-term gains from routine rebalancing earlier in
the year. Those are fully offset, so net capital gains for 2022 are zero. Second, the
remaining $15,500 in losses carries forward indefinitely. You can use $3,000 per year
to offset ordinary income, and the rest offsets future capital gains. In 2023 — which
I expect to be a high-income year from NLTK — that carryforward will be very
valuable.
[0:14] Alex Chen: What do you mean, 2023 will be high income from NLTK?
[0:15] Sarah Chen: Your RSU schedule has a large tranche coming. I don't want to get
too specific yet because the vest price is unknown, but I'd plan for NLTK income
that's materially larger than what we've seen in any prior year. I'll do a full 2023
projection in Q4 so we can plan accordingly.
[0:17] Sam Chen: That's a bit alarming.

[0:18] Sarah Chen: It can feel that way, but it's good news. More income means more
wealth. The planning challenge is managing the tax — and that's exactly what we're
doing right now by building this carryforward. Think of the $15,500 carryforward as a
tax asset sitting in your account, waiting to offset future income.
[0:20] Alex Chen: The wash sale rule — do we need to do anything?
[0:21] Sarah Chen: Yes — I've flagged October 12th in my calendar. That's 30 days
from the UECIX sale. Before that date, you cannot buy UECIX or any fund the IRS deems
'substantially identical.' UECIY is not substantially identical — that's the whole
point of the swap. But you shouldn't buy UECIX in your 401k either. Is there any
automatic rebalancing in your workplace plan that might buy UECIX?
[0:24] Alex Chen: I don't think so — it's mostly in a target-date fund.
[0:25] Sarah Chen: Good. A target-date fund holds many securities, so it's unlikely
to trigger the wash sale. But confirm with HR or your plan provider that there's no
automatic rebalancing into UECIX specifically before October 12th. I'm also
including a 30-day wash sale calendar in your secure vault. The Q3 NLTK vest: 625
shares at $14 — $8,750 W-2 income, same protocol. Very low vest price this quarter.
[0:27] Sam Chen: NLTK is really down. Should we be worried about the company?
[0:28] Sarah Chen: From a planning standpoint, we're not relying on NLTK stock for
your financial security — that's the whole point of systematic diversification. If
the company has problems, your diversified portfolio is unaffected. Action items:
wash sale window closes October 12th — no UECIX purchases before then; I'm filing a
formal TLH completion memo; 2023 NLTK income projection coming in Q4.
[0:30] Meeting adjourned
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ACTION ITEMS
1. 30-day wash sale window: no UECIX purchases until October 12 — client to check
401k plan
2. File TLH completion memo — DecisionID-2022-301 documented; $22,250 losses
realized
3. Confirm $15,500 carryforward captured in tax records — coordinate with CPA by
year-end
4. Prepare 2023 NLTK income projection for Q4 meeting
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CONFIDENTIAL — For client use only. Not for distribution.
