High-net-worth investors are lining up moves to shrink 2026 tax bills.

Capital gains and aggressive loss harvesting

Advisers say capital gains sit at the center of planning this year. Mitchell Drossman, head of national wealth strategies in Bank of America’s chief investment office, points to years of strong market gains that have left wealthy clients holding large unrealized gains. "The biggest tax story to me is a capital gains and investing story," Drossman said, adding many clients face big tax bills if they monetize positions without planning.

One approach getting renewed attention is long-short tax-loss harvesting. Traditional tax-loss harvesting involves selling investments that have lost value to offset gains realized elsewhere. Long-short harvesting takes that a step further: portfolios borrow to take short positions expected to fall while keeping long bets they expect to rise, producing losses to use against gains while maintaining an overall market exposure.

Advisers say the strategy can be attractive when markets are volatile and investors hold a larger base of appreciated assets to pick from. That gives managers more opportunities to realize losses without materially altering a client's risk profile.

This strategy isn't free — it brings real costs and risks. If clients borrow to short, they can run into margin calls that force hurried trades. Selling or shorting the wrong way can trip tax rules like wash-sale or constructive sale, so advisers time moves carefully and keep clear paperwork.

Bonus depreciation and business purchases

The tax law changes enacted in 2025 renewed bonus depreciation, which lets qualifying businesses deduct the full cost of certain assets in the year they’re placed in service. Adam Ludman, head of tax strategy at J.P. Morgan Private Bank, said many of his clients with operating businesses are buying equipment and other large-ticket items with the deduction in mind.

That can include everything from computer systems to aircraft used in a business. For owners of closely held companies, accelerating deductions into an earlier tax year reduces current taxable income, producing immediate tax savings. Real estate developers and property owners are also reexamining how to allocate costs inside projects to accelerate write-offs where tax rules allow.

Taxes matter, sure — but the decisions also change how a business runs day to day. They affect cash flow, borrowing capacity and how businesses are valued. Executives and owners weigh the near-term tax benefit against long-term depreciation and maintenance schedules.

Estate-tax landscape and shifting priorities

Lawmakers made a major change during the 2025 session that reshaped planning priorities. The estate tax exemption was raised permanently to $15 million per person, up from $13.99 million and from an earlier expectation that the exemption would be cut in half at the end of 2025. That move has prompted some wealthy families to shift focus away from estate-tax avoidance and toward lowering taxes on income and gains.

Because many estates are now below the threshold that would trigger federal estate tax, advisers say clients are concentrating on strategies that reduce annual income tax and capital gains exposure instead of aggressive lifetime gifting to remove assets from taxable estates.

That shift changes which tools advisers push: rather than emphasizing big intergenerational gifts or complicated trust structures primarily aimed at estate tax savings, planners are revisiting asset location, holding periods, and tax-efficient income streams.

Liquidity, timing and enforcement risks

When you sell can make or break the tax outcome, so timing is crucial. Selling appreciated assets before a large tax bill is due can create liquidity needs that force sales at inopportune prices. Some wealthy investors are tapping lines of credit or structured loans to pay taxes while keeping positions intact.

At the same time, changes at the Internal Revenue Service are part of the backdrop. The agency reported plans to cut roughly 6,700 jobs as part of a restructuring in 2025. Advisers say that could affect enforcement and processing times, but it doesn't remove the need for careful tax moves. Tax shelters and aggressive transactions still face scrutiny, and clients typically want well-documented economic rationale for any strategy that reduces tax liabilities.

Practical planning steps advisers highlight

Advisers are running through concrete steps with clients as they plan for 2026. Those steps include mapping out projected capital gains and income for the year, identifying candidates for loss harvesting, and timing asset sales to smooth realized gains across years. They also include evaluating whether accelerated depreciation or equipment purchases make sense for closely held businesses.

For families with closely held companies or concentrated stock positions, advisers recommend stress-testing liquidity: can the client meet tax obligations without forced asset sales? If not, they look at borrowing structures and insurance options that can provide funds when taxes are due.

Some clients are considering partial sales combined with hedging strategies to defer or spread tax consequences over multiple years. Others are using charitable vehicles that can absorb appreciated assets and provide an immediate deduction, though the use and timing of charitable giving depend on each client’s goals and tax profile.

Operational and compliance considerations

Putting an aggressive tax plan in place usually means investment teams, tax lawyers and trustees have to work together. Long-short harvesting demands operational setups that allow simultaneous long and short exposure with accurate record-keeping. Accelerated depreciation claims need supporting engineering or cost-segregation studies in real estate projects.

Advisers caution that audits or challenges can take years to resolve, so they favor approaches with clear business reasons beyond the tax benefit. Documentation that shows economic intent, not just tax avoidance, helps withstand scrutiny.

Robert Frank, who covers affluent investors and consumers, notes that the forever-changes to some provisions after the 2025 legislation removed a deadline but not the need to review holdings annually. Planning becomes ongoing: small shifts in markets or personal circumstances can change the balance of which moves make sense.

What wealthy taxpayers will watch this year

As investors finalize plans for 2026, they will watch market returns, interest rates, and policy signals from Washington that could affect future changes. For now, advisers are focused on squeezing tax efficiency out of current rules: harvesting losses where available, accelerating deductions for businesses, and reassessing estate plans given the higher exemption.

That means many high-net-worth households aren't making a single big bet. They're layering tools to smooth tax liabilities, conserve liquidity, and preserve long-term investment goals.

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The estate tax exemption now stands at $15 million per person.