How do you handle the capital gains taxes? I’d love to be able to rebalance the massive S&P 500 portion of my portfolio into other things but it would trigger huge federal and state taxes. Was hoping to hold on to these until retirement at which point I’d slowly be selling it for living expenses and the income taxes would be much smaller.

I'm very curious about this as well. This is the main thing that has held me back from a meaningful rebalancing. Eating a huge tax bill to avoid a theoretical future loss of unknown size and duration while also losing out on potential gains if that loss ends up not materializing is a hard pill to swallow. I suppose this is probably why most long-term investment advice suggests not trying to time the market unless you have a very short time horizon. (Note: for me, I'm referring to funds in taxable brokerage accounts.)

You pay taxes with the proceeds from the sale? You sell all the losers in your portfolio to offset what gain you can?

I did this in my IRA and 401(k). No tax penalty or gains tax in doing that.