Avoiding tax losses

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Avoiding tax losses

Postby sirweffington » Mon Jun 17, 2013 3:46 am

Hey Boglehead members,
I am 48 years old and am considering re-balancing my portfolio. Recently I came into a good bit of money and want to invest it for my retirement, I currently have a mixture of 50% bonds and 50% stocks. How would you recomend re-balancing my portfolio so I can avoid tax losses with my current ETFs? Also given that I am in the highest tax bracket what kind of bond funds do you recomnd?
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Re: Avoiding tax losses

Postby Default User BR » Mon Jun 17, 2013 4:11 pm

You haven't given us any background on your current holdings. Post a portfolio review:

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212


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Re: Avoiding tax losses

Postby livesoft » Mon Jun 17, 2013 4:48 pm

Why would one want to avoid tax losses? It's like free money.
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Re: Avoiding tax losses

Postby bberris » Mon Jun 17, 2013 5:09 pm

I think he means he wants to avoid paying taxes. As in if you pay taxes, you lost that money.
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Re: Avoiding tax losses

Postby kenyan » Mon Jun 17, 2013 5:09 pm

livesoft wrote:Why would one want to avoid tax losses? It's like free money.


I think he just means 'money lost to taxes' not tax losses in the harvestable sense.
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Re: Avoiding tax losses

Postby livesoft » Mon Jun 17, 2013 7:57 pm

In that case, if one needs to reduce the holdings of something that has gains, simply give the shares away to charity that have been held more than one year and that have gains. One will need to be able to itemize on Schedule A to take the charitable contribution deduction. One can give the shares to their own donor-advised fund, too. Either way: No losses to taxes. :)
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Re: Avoiding tax losses

Postby sirweffington » Mon Jul 01, 2013 7:26 pm

Emergency funds: No need for emergency funds
Debt: Debt is currently managed
Tax Filing Status: Married, 3 children
Tax Rate: 35%
State of Residence: DC
Age: 48
Desired Asset allocation: 60% stocks, 40% bonds
Desired International allocation: 10% of stocks

6 figures

Current retirement assets
Her Roth IRA at Fidelity
10% PIMCO Total Return Fund Institutional Class, PTTRX, .46%
10% Fidelity Capital and Income Fund, FAGIX, .77%

20% Spartan Intermediate Treasury Bond Index Fund- Investor class, FIBIX, .2%

Available funds

Funds available in his 401(k)
30% Vanguard 500 Index Fund Investor Class, VFNIX, .17%
20% Vanguard Small Capitalization Value Index Fund Investor shares, VISVX, .24%
10% Vanguard Emerging markets stock index fund, VEIEX, .33%

Questions:

1. Livesoft: Are their any charities that you could recommend?

2. Also I posted some of my asset allocation, I am currently unhappy with my bond funds because of their past returns and my expectation of rising interest rates, I want to reduce my duration risk and also can you explain relationships between convexity, duration and yields?
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Re: Avoiding tax losses

Postby livesoft » Mon Jul 01, 2013 7:52 pm

sirweffington wrote:1. Livesoft: Are their any charities that you could recommend?

American Red Cross
PBS
NPR
Damon Runyon Cancer Research Foundation
American Cancer Society
Helen Hay Whitney Foundation
etc.
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