That's a pretty big chunk of fees to pay - over 5%. It would make sense if you are likely to reduce your tax rate by more than that, which is possible but not guaranteed, depending on what your marginal rate is this year and what the cap gains rate is the year you eventually sell.

The only downside is if you're in a low income year. If you are, then this year you want to harvest gains and not losses, particularly if you can do so in the 0% long-term cap gains bracket.

Otherwise, TLH is generally beneficial if you're in your working years, since it's moving some income from this year to a future year when your tax rate will probably be lower.

That being said, if you need to sell investments to fund a Roth IRA, that typically makes sense whether those investments are at a gain or a loss.

Look at the math for each person. A put in 20 and got back 60. Their result is a gain of 40. B puts in zero and got back 40. Their result is the same as A's.

The way they're doing it (adding & subtracting 20) would make sense if A gave that money directly to B*.* But they didn't give the money directly to B - they put it into a shared asset. If A&B have shared ownership, then A was really giving half of that money back to themselves right away, leaving only a 10 imbalance that they were 'giving' to B. If you do it that way, then you say that B owes A that 10, so you subtract 10 from B's share and add it to A's share. And you wind up with the same 60/40 split.

Great books on this:

Accelerando by Charles Stross Ken MacLeod’s Corporation Wars.

How old are your kids, and what would you hire them to do?

What you want to do is legal, but only to the extent you're giving them a fair wage. You can't 'hire' a 6-year old to do some light chores then pay them $6,000.