It's complicated - you really have to pay attention to the details.
Those of us in retirement with taxable accounts typically allow our distributions to accumulate in cash during the year (i.e. don't automatically reinvest them in the fund) and then use the proceeds to rebalance after taking out our annual withdrawal. This helps minimize taxes somewhat.
I am careful about the tax consequences of rebalancing, and because of that I try to do it mostly from distributions which I have to pay taxes on anyway. This helps reduce the amount of fund selling I usually have to do to rebalance.
I keep a pretty wide deviation from AA - a given asset class has to be at least 8% out of balance before I'll consider rebalancing. Unless there is a large market event (i.e. a major crash), I'm not likely to need to rebalance except at the time of my annual withdrawal. This also minimizes taxes.
If I'm selling bonds to buy stocks, the tax consequences tend to be minimal as bond funds don't appreciate that much. After a large stock run-up, my stock funds tend to pay out pretty large capital gains distributions anyway, so I don't usually have to sell much more for rebalancing.
You do what you can........