TLH Partner?

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NewlyMinted
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Joined: Wed Apr 19, 2017 9:22 pm

TLH Partner?

Post by NewlyMinted »

I recently sold some COLTX - Columbia Tax Exempt Fund for a loss, and bought some FSTFX - FIDELITY LIMITED TERM MUNI INCOME . It seems a bit late to ask :oops: , but hopefully this would not be considered a wash sale as far at Tax Lost Harvesting (TLH) is concerned. It seems like COLTX is a long term muni, and FSTFX a short term muni, so they are different. Just want to get some opinions on this, thanks.
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Nate79
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Location: Delaware

Re: TLH Partner?

Post by Nate79 »

Do they have:
Similar return, similar yield, similar holdings, similar fees, similar risk?

Since these are your funds you should understand these details regardless of potential wash sale.
Gill
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Re: TLH Partner?

Post by Gill »

Definitely not a wash sale.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
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goingup
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Re: TLH Partner?

Post by goingup »

When TLHing just make sure your TLH partner is not "substantially identical". Here's more about that from FairMark: http://fairmark.com/capgain/wash/wsident.htm

Your partner was fine--not substantially identical (at all).
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House Blend
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Re: TLH Partner?

Post by House Blend »

NewlyMinted wrote:I recently sold some COLTX - Columbia Tax Exempt Fund for a loss
If you're running short on things to worry about :twisted:, here's something:

If any of your shares of COLTX sold at a loss were held for 6 months or less, then the loss you can claim might be reduced.

It depends on how the fund manages and accrues dividends: if it declares them daily and distributes them monthly (or more often), then this rule doesn't apply. Most Vanguard Muni Funds do this, but VTEAX (Tax Exempt Bond Index) does not. I have no idea about COLTX. Check your prospectus.

If COLTX is like VTEAX, and the shares you sold produced $100 of tax-exempt interest, then the loss you can claim is reduced by $100.
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Earl Lemongrab
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Re: TLH Partner?

Post by Earl Lemongrab »

goingup wrote:When TLHing just make sure your TLH partner is not "substantially identical".
There is NO way to do that, because other than exact security or qualifying option, there is no guidance from the IRS as to what constitutes "substantially identical". Fairmark articles are not issued by the IRS and have no authority.
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