TLH Please double-check my counting

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dodecahedron
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TLH Please double-check my counting

Post by dodecahedron » Thu Oct 16, 2014 10:59 am

I would like to TLH some shares of VTSAX purchased on 8/15/2014 (held in taxable of course). If I want the September dividend (ex dividend 9/23) to remain qualified, is it safe for me to sell these shares today? I have read the wiki, the link to the Fidelity article, and the IRS Pub 550, but want to make sure I am not doing some sort of silly oversight. Purchased on 8/15 means that I start counting the days on 8/16. There were 15 days in August (from August 16 through August 31 inclusive), 30 days in September (entire month) plus 16 days in October (through today, October 16), which--I believe exactly meets the 61 day rule.

Correction: actually 16 days in August--see next post

(As far as other potential concerns, no I have not purchased any VTSAX (or any substantially identical mutual fund or ETF) in any account since 8/15 and I do not intend to purchase any more shares of VTSAX (or substantially identical) until possibly early December, so no concerns about wash sales.) I am planning to exchange into 80/20 mix of Vanguard 500 and Vanguard Extended mutual funds.
Last edited by dodecahedron on Thu Oct 16, 2014 11:52 am, edited 1 time in total.

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dodecahedron
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Re: TLH Please double-check my counting

Post by dodecahedron » Thu Oct 16, 2014 11:51 am

Thanks to a PM, I now understand that the rule to begin counting with Aug 16 (the day after purchase) means to count August 16 as "day 1" (not as "day 0" as I had been conservatively assuming in the absence of explicit guidance otherwise), so it looks like I will actually be at 16 days in August plus 30 in September plus 16 this month and definitely safe to TLH today while preserving qualified dividends paid in September as qualified (and keeping my 2014 tax return a bit less complicated.)

Bubbagump
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Re: TLH Please double-check my counting

Post by Bubbagump » Thu Oct 16, 2014 2:01 pm

I thought I saw a reply to this and then saw it disappear a second later. Any who... when you talk about the dividend on 9/23, are you talking about a dividend that was used to buy more shares (reinvested) or a dividend that was paid out?

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dodecahedron
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Re: TLH Please double-check my counting

Post by dodecahedron » Thu Oct 16, 2014 9:40 pm

Bubbagump wrote:I thought I saw a reply to this and then saw it disappear a second later. Any who... when you talk about the dividend on 9/23, are you talking about a dividend that was used to buy more shares (reinvested) or a dividend that was paid out?
Good point to raise, Bubbagump. All my dividends in taxable get directed to Vanguard MM Prime so I can figure what to do with them (rebalance or whatever.) So no, it didn't get automatically reinvested in VTSAX.

livesoft
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Re: TLH Please double-check my counting

Post by livesoft » Thu Oct 16, 2014 10:38 pm

This thread is not about wash sales, but is about whether a dividend will be designated "qualified" and have a favorable tax rate. There are some holding period rules for the underlying shares that must be met or a qualified dividend will be "disqualified" and no longer receive qualified status and the favorable tax rate that goes with that.
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