The strategies can vary in their approach. The Parametric custom core strategy tracks closely to a client-selected index on a pre-tax basis and then aims to outperform on an after-tax basis. The strategy identifies stocks with losses that are sold throughout the year on a frequent basis while simultaneously identifying suitable replacement securities to keep the portfolio in line with the benchmark.

The replacement securities aren’t the same stock because of the SEC  “wash rules” which prohibit the sale of securities at a loss for tax purposes and then the buying of  “substantially identical securities” within 30 days.

Some financial advisors and family offices have been long-time users of tax-harvesting strategies, but the number is expected to increase with the Trump state tax deductibility limit.

“The Trump administration rules have heightened  the awareness of what taxes are doing, making clients who pay more taxes accurately aware of that, so tools that limit the overall tax bite are becoming more appealing,” said Rick Pitcairn, chief investment officer at Pitcairn, a Philadelphia area family office  that advises on $5.7 billion in assets under advisement.

Pitcairn is a long-time user of tax harvesting strategies from Parametric but has set a minimum of $500 million for such separate accounts.

Parametric and Modern Portfolio Advisors haven’t been shy in sharing the state tax deduction changes in white papers, promotional material and conference calls, aimed at getting more advisors aboard.

“It’s a discussion about Washington and Wall Street and how the decisions in Washington are impacting investors,” said Eaton Vance’s Moninger of the conference calls with financial advisors.

Managed Portfolio Advisors offers a view in its white paper of how the tax burden has increased in California following the Trump changes. It says that, under the old tax code, Californians in the top income bracket paid a marginal rate of 31.3% on long term capital gains and dividends− 20% in federal capital gains taxes, 3.8% in federal net investment income, and 13.3% in state taxes.

The paper says the deducting of state income taxes led to a break in federal taxes that amounted to 5.8%, before the tax changes eliminated the state deductions above $10,000.

Overway in his white paper says the Trump administration’s limit on state income tax deductions affects more than  California and New York. He notes the  new law lowers the federal marginal tax to 37% from 39.6%, for short-term capital gains, positively affecting individuals in states with no income taxes. Twenty-three states, however, plus the District of Columbia have state income tax rates that are 6% or greater, which Overway says more than offsets the reduction in the federal rate.

Advisors say interest in the tax-harvesting strategies will continue in  2019 as investors tackle their 2018 returns.

“We’re spending a lot more time with those tax reduction strategies than we had in previous years because of the change in tax law,” said David Strege, partner and senior financial planner at wealth advisor Syverson Strege and Co. in West Des Moines, Iowa.

He said the severe reduction in state income tax deductibility has spurred interest in alternatives to reduce overall taxes.