Page 1 of 1

Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 8:50 am
by canga
I TLH'd at the end of 2014. All of my funds were set up at SpecID cost basis, so I selected the tax lots I wanted to sell. A week later I noticed that the tax lots I identified were not sold...and Vanguard's transaction confirmations claimed i had used first in first out (FIFO)!

Fortunately when I made the transaction I made a PDF of the confirmation, which of course shows SpecID and includes the specific tax lots I sold.

On the phone with Vanguard -- 45 minutes and counting. I am again reminded that it's important to PDF confirmations and be vigilant in checking account statements.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 8:57 am
by canga
Update: Vanguard reportedly fixed the issue and it will take 7 to 10 days for the specific tax lots to report correctly. I asked if this was a known issue and I was told that it's the first they have heard of it.

I did TLH earlier in 2014 and the SpecID was sold correctly.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 9:31 am
by dbr
Are there issues with covered vs not covered shares involved?

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 9:39 am
by canga
dbr wrote:Are there issues with covered vs not covered shares involved?
All shares for each fund I selected to sell were covered shares, however due to Vanguard incorrectly selecting FIFO the shares Vanguard selected to sell were not covered.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 9:44 am
by dbr
canga wrote:
dbr wrote:Are there issues with covered vs not covered shares involved?
All shares for each fund I selected to sell were covered shares, however due to Vanguard incorrectly selecting FIFO the shares Vanguard selected to sell were not covered.
I suppose it is possible part of the systems confusion at Vanguard is that non-covered shares did exist even though you did everything right.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 1:29 pm
by stlutz
I had this problem last year: http://www.bogleheads.org/forum/viewtop ... &p=1744947

I think I figured out at the time that the default cost basis method overrode what I selected at the time of sale. So, FIFO had been my default which I changed to specific ID when I did the sale, but it went with FIFO.

In my case it took 5 weeks to get the problem resolved.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 1:34 pm
by HueyLD
........

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 2:37 pm
by TIAX
I sold some shares of two funds in two different taxable accounts using SpecID earlier this year and although everything went fine on the cost basis page, and SpecID was listed as the method on the confirmation, one of the confirmations listed the tax lots and the other had no tax lots. I called Vanguard and they had no idea why that would happen. All of these were covered shares.

Re: Vanguard TLH - Check your confirmations!

Posted: Mon Jan 05, 2015 2:45 pm
by fposte
From my liquidation experience a few months ago that defaulted back to FIFO, it looks like SpecID takes several days to process after you select it, and if you sell before that happens, the basis defaults to FIFO. I don't know if that's what happened to everybody on this thread, but some people seem to be talking about transactions that happened soon after setting the basis to SpecID.

Re: Vanguard TLH - Check your confirmations!

Posted: Tue Jan 06, 2015 12:34 am
by canga
HueyLD wrote:
canga wrote:
dbr wrote:Are there issues with covered vs not covered shares involved?
All shares for each fund I selected to sell were covered shares, however due to Vanguard incorrectly selecting FIFO the shares Vanguard selected to sell were not covered.
Which method did you select for the mutual fund shares you sold before you actually sold the shares?

Did you preselect the method, or did you overwrite the default method you chose earlier?
SpecID was set up as my default and was used when I sold the shares (otherwise I would imagine that I would not have been able to select my lots). The confirmations page (after clicking "Submit" for the transaction) confirmed that SpecID was used, and confirmed which tax lots were sold. It was not until Vanguard issued an "official" confirmation that the transaction was changed to FIFO. Very strange.

Re: Vanguard TLH - Check your confirmations!

Posted: Tue Jan 06, 2015 12:36 am
by canga
fposte wrote:From my liquidation experience a few months ago that defaulted back to FIFO, it looks like SpecID takes several days to process after you select it, and if you sell before that happens, the basis defaults to FIFO. I don't know if that's what happened to everybody on this thread, but some people seem to be talking about transactions that happened soon after setting the basis to SpecID.
My accounts were set to SpecID for a minimum of several months (some for years).

Re: Vanguard TLH - Check your confirmations!

Posted: Tue Jan 06, 2015 12:50 am
by abyan
Do the same to me on a transaction in November that I only just caught. I did specific ID, picked the shares to sell, VG's site told me I'd have $9k in cap gains, and now the site says FIFO with $16k in gains. Talked to them today, and sending them my screen shot showing the $9k confirmation. They said they're pulling up the archives of the web site. Sounds like this is a bigger problem.

Re: Vanguard TLH - Check your confirmations!

Posted: Tue Jan 06, 2015 7:14 am
by johnanglemen
This has happened to me repeatedly at Vanguard and I've discussed it with them at length, so they are mistaken when they say this is the first they've heard of it. From what they told me, there are many times where the order cannot be processed automatically -- such as if it's submitted during a particular part of their nightly update process, or if it's submitted shortly after a related order -- so it is instead routed to a human for manual processing, and then sometimes the human messes it up. It is really inexcusable considering how much money it can cost you and how easily it may go unnoticed.