TLH Partner?

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

TLH Partner?

Post by NewlyMinted » Wed Aug 09, 2017 8:18 pm

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.

Nate79
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Location: Portland, OR

Re: TLH Partner?

Post by Nate79 » Wed Aug 09, 2017 8:23 pm

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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Location: Florida

Re: TLH Partner?

Post by Gill » Wed Aug 09, 2017 8:35 pm

Definitely not a wash sale.
Gill

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goingup
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Re: TLH Partner?

Post by goingup » Thu Aug 10, 2017 8:44 am

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 » Thu Aug 10, 2017 12:48 pm

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 » Thu Aug 10, 2017 12:51 pm

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.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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