1) Client Profile
Client: Bob (High-Net-Worth, top federal bracket)
Years analyzed: 2023 + 2024 returns (uploaded into Hive Tax Planning)
Primary goal: reduce investment income tax drag while keeping Bob’s core market exposure
What I see immediately in Hive’s investment-income summary (from the tax return):
- Qualified dividends: ~$72,000
- Taxable interest: ~$30,000
- Long-term capital gains: ~$611,000
- Short-term capital gains: ~$147,000
This mix tells me Bob is realizing meaningful gains, including a large chunk of short-term gains taxed at ordinary rates—exactly where tax-efficiency improvements can move the needle.
2) Analysis & Challenges
As the advisor, I’m not looking for generic “tax tips.” I want two things fast:
- A comprehensive menu of actionable strategies that match Bob’s actual return data
- A workflow to pressure-test which strategies apply, then go deep on the best one
The main constraint: a tax return shows outcomes (dividends/gains), but not always holdings and structure (ETF vs mutual fund vs SMA), so I need Hive to help me identify where a quick follow-up question will change the recommendation.
3) Advisor Workflow in Hive Tax Planning
Step 1 — Upload Bob’s tax return and generate a full strategy set
I start by uploading Bob’s 2023 and 2024 returns into Hive Tax Planning and run the “Tax Strategy” generation.
Hive returns a comprehensive list of strategies, prioritized based on Bob’s facts (top bracket + large realized gains + meaningful QDI + interest). The output includes multiple categories, but I focus on the investment-income section because that’s the client’s biggest tax drag driver.
In the strategy list, Hive flags two investment-income strategies as high-potential:
- Strategy #5: Shift to tax-efficient vehicles (e.g., ETFs)
- Strategy #6: Direct indexing (to expand tax-loss harvesting opportunities)
This is the moment I like most: Hive doesn’t just give ideas—it gives me a ranked shortlist I can work through with the client.
Step 2 — Ask Hive the “efficiency question” to frame the client conversation
Before choosing a tactic, I prompt Hive:
“How efficient is Bob’s investment income?”
Hive produces a plain-English assessment based on the return data:
- overall investment tax efficiency is good
- but there’s meaningful improvement potential due to the size and composition of realized gains, especially short-term gains
That single summary becomes my client-facing opener:
“You’re doing many things right, but the return shows significant realized gains, including short-term gains. That’s where we can engineer better after-tax outcomes.”
Step 3 — Work through Strategy #5 (ETF shift) and validate applicability
I open Strategy #5 inside Hive.
Hive’s logic assumes Bob may be holding broad market exposure in a less tax-efficient vehicle (often mutual funds that distribute capital gains). But Hive also highlights an important limitation:
The tax return doesn’t specify whether Bob’s S&P 500 exposure is held via ETF, mutual fund, or another structure.
So I verify the information with the fill in questionnaire.
With that clarified, the outcome is clean:
- If Bob already holds an S&P 500 ETF, then Strategy #5 is not actionable (he’s already tax-efficient on structure)
Result: I mark Strategy #5 as not applicable for Bob.
This is exactly what I need from a tool: it helps me eliminate a strategy quickly and defensibly, so I don’t waste client meeting time.
Step 4 — Go deep on Strategy #6 (Direct Indexing) as the best-fit investment-income strategy
Next, I open Strategy #6: Direct Indexing inside Hive.
Hive frames the strategy in a way that’s both technical and client-ready:
- Replace a single S&P 500 holding with a separately managed portfolio that owns many of the underlying stocks
- This creates significantly more tax-loss harvesting opportunities while maintaining similar market exposure
- For a top-bracket client with large realized gains, harvested losses can be used to offset gains (and in some cases ordinary income, depending on the year’s activity)
Hive also calls out the “advisor reality”:
- Direct indexing is more complex
- It requires setup, ongoing management, and coordination with the client’s broader portfolio and tax picture
- Which makes it a strong planning-led advisory conversation—not just an investment switch
For Bob, Hive’s “fit logic” is straightforward:
- 90% S&P 500 exposure → ideal candidate
- High bracket → every avoided dollar of gain is more valuable
- Large realized gains (especially STCG) → immediate opportunity to offset taxable events
- Scale (~$5M) → enough breadth to make harvesting meaningful
Result: I select Strategy #6 as the primary action plan for investment-income tax efficiency.
4) Estimated Savings & Benefits (Client + Practice)
Because the transcript doesn’t include Bob’s full holdings, turnover, and state tax, I present savings as scenario-based estimates—exactly how I’d position it in a planning meeting.
What Hive helps me quantify conceptually:
- Bob has $147k of short-term gains taxed at ordinary rates
- If direct indexing helps harvest losses that offset a portion of those gains, the federal tax savings can be material
Illustrative federal-only scenarios (using top ordinary + NIIT ≈ 40.8%):
- Harvest $100,000 losses → ~$40,800 estimated savings
- Harvest $147,000 losses (offset most STCG) → ~$60,000 estimated savings
Beyond dollars—why this matters operationally
- Faster strategy discovery: Hive produces a comprehensive list instantly, then helps me narrow to what truly applies
- Higher-quality meetings: I walk in with a ranked strategy set and a client-ready narrative
- Revenue expansion: Direct indexing naturally opens planning scope:
- ongoing tax-aware portfolio management
- coordination with gain timing, charitable gifting, and concentrated positions (if any)
- deeper advisory engagement vs. one-time recommendations
This workflow demonstrates how Hive Tax Planning supports the way financial professionals actually work:
- Upload return → generate a comprehensive, prioritized strategy set
- Validate assumptions with quick questions → filter to what applies
- Go deep on one strategy → produce a client-ready action plan
For Bob, Hive helped me quickly rule out “ETF switching” and focus on the highest-impact path: direct indexing + systematic tax-loss harvesting—a strategy that can reduce investment tax drag and expand advisory value.