I'm interested in learning the boundaries of wash sale rules beyond what is written in the Wiki.
That's a bit of a tangent, so let's take that off to private messages if my reply here is not sufficient. I generally use Lipper Leader ratings, FundMojo assesments, as well as my own review of other aspects of funds to make such decisions. If you check out just the FundMojo pages for those two funds, you'll clearly see many, though not all, of the things that motivated my actions. Note, though, that they were independent actions. I sold JORAX because I felt it was inadequate, and then two months later, as part of rebalancing prompted by more of my financial educational process, added ARTGX.Johm221122 wrote:Just curious why did you buy this fund for taxable?why did you not hold Janus fund?
bUU wrote:BBL wrote:http://www.fpanet.org/journal/BetweentheIssues/LastMonth/Articles/Tax-LossHarvestingtheRebalancingAct/
That's a peer-reviewed journal, so it should be a rock-solid source for anyone (though I could imagine someone challenging me to prove that that article itself was peer-reviewed).
bUU wrote:I'm interested in learning the boundaries of wash sale rules beyond what is written in the Wiki.
bUU wrote:That disturbs me a great deal.Default User BR wrote:You know as much as anyone.
bUU wrote:Please don't dismiss the issue so quickly. The IRS publication is (seemingly deliberately) vague, as pointed out here:
"For example, in the case of index funds, don't switch out of one family's fund and into another that tracks the same index. You might argue that you're dealing with two different fund companies with two different expense ratios, but you may not prevail. The IRS has been rather vague in what it deems identical with regard to mutual funds, preferring to consider all the facts and circumstances of each case."
http://www.forbes.com/2008/12/22/wash-s ... s_inl.html
BBL wrote:The following is a list of mutual fund transactions that are generally considered to be acceptable under the wash sale rules despite the lack of a concrete definition of "substantially identical security":
1. Sell one index fund and buy another index fund, if the indexes of the two funds are not the same index (e.g., S&P 500 for the Russell 1000).
2. Sell one actively managed fund and buy a fund at another company with different portfolio managers.
3. Sell an index fund and buy an actively managed fund regardless of the fund company.
4. Sell an actively managed fund and buy an index fund regardless of the fund company.
Full article here:
http://www.fpanet.org/journal/Betweenth ... ancingAct/
bUU wrote:...My instinct is that the answer would be 'no' because their holdings and return histories are so different.
dratkinson wrote:OP, that's the list. There is nothing clearer from the IRS. From my faulty memory here, no one following above list has reported wash sale issues with the IRS.
bUU wrote:<<snip>> I sold JORAX because I felt it was inadequate, and then two months later, as part of rebalancing prompted by more of my financial educational process, added ARTGX.
retiredjg wrote:The IRS has stated something like "in general, one mutual fund is not substantially identical to another mutual fund" (some IRS Pub I looked at in the past). There is some thought that MIGHT not apply to 2 index funds that follow the same index (note I didn't say similar index). But even in that case, there is an argument that those are not "substantially identical" because ownership, shareholders, managers, and boards of directors are not the same and that that is what "substantially identical" is all about (some case law from awhile back which may or may not have been replaced with new case law).
Wagnerjb wrote:But we certainly have enough to make an informed reasoned decision on how two mutual funds would be viewed as far as the wash rule issue.
retiredjg wrote:If that is true, then what is it that we have to make these decisions?
This is not meant to be a smarta$$ question. I don't know what you think we have to make an informed reasoned decision. If we knew that, why does this subject come up again and again with no apparent conclusion? The way I see it, all we have are a lot of widely differing opinions.
Substantially identical securities. Two issues of U.S. Treasury 2 1/4 percent bonds which differ slightly only as to first call, maturity and
interest payment dates, are substantially identical securities within the meaning of the wash sales provisions. Consequently, loss sustained upon sale of bonds of one issue followed by purchase of the other within the 61-day period will not be allowed. §§39.118–1, 1.1091–1. (Sec. 118, ’39 Code; Sec. 1091, ’86 Code.) Rev. Rul. 58-211, 1958-1 C.B. 529.
An important case for determining whether two bonds are substantially identical is Hanlin.
In its decision, the court stated that substantially identical means "something less than precise correspondence will suffice to make the transaction a wash sale." The court also noted the legislative history of the wash-sale rules does not define the "something less." The court concluded that a "change in [economic] position" is the determining factor in deciding if the loss is "fictitious" and, therefore, disallowed under the wash-sale rules. Basically, if two investments have different characteristics that would affect the investment decision of an investor, the investments would not be considered substantially identical.
Futures Contracts. GCM 38369 (referenced in 39551) says that treasury futures are considered “substantially identical” to treasuries for the purpose of 1091.
retiredjg wrote:Wagnerjb wrote:But we certainly have enough to make an informed reasoned decision on how two mutual funds would be viewed as far as the wash rule issue.
If that is true, then what is it that we have to make these decisions?.
Default User BR wrote:I have not found Andy's prior arguments to be compelling, as evidenced:
Wagnerjb wrote:Brian: I certainly respect your right to interpret the wash sale rule differently than I do; however in this thread I am just highlighting that we have actual court cases that help us determine how to understand what "substantially identical" means. One can draw a different conclusion about how to apply the rule to specific mutual funds, where we have no actual rulings. But I don't think you can say we have nothing to base our opinions on.
Wagnerjb wrote:In a recent thread on wash sales, I gave several concrete examples that add to our understanding of how the Tax Courts interpret the issue of whether two investments are "substantially identical".