Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

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Topic Author
rhodnius
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Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

Hi,

We need a 2nd opinion. We're planning to TLH total domestic & large cap . We currently use the 3 fund portfolio with some accounts approximating the total domestic stock. The funds are scattered in different accounts with the amounts below. Our current & desired AA is 80/20 stock to bond (56% Domestic / 24% Intl / 20% Bond). To avoid a wash sale, is it advisable to switch all our current domestic total stock and large cap funds in our tax-advantaged accounts (401k, 403b, 457b, 2 Roth IRAs, 2 HSAs) to small and mid-cap funds? If we do this, is the tilt towards small/mid cap too big and if it is, is that a bad thing? What should be the ratio of small to mid cap (50/50?) I will list the choice of available small and mid cap funds (in parenthesis) beside the total stock/large cap. Also in our HSA, which small and mid cap funds should we use?

We appreciate any input. Thanks so much!!!

Taxable
VTSAX: 428,118
VTIAX: 342,282

401k
VITPX: 229,022 (VSIAX)
VBXMPX: 64,451

403b
VINIX: 19,226 (VMCIX, VSCIX)
VMCIX: 886
VSCIX: 3,447
VBTIX: 149,336

457b
VINIX: 14,311 (VMCIX, VSCIX)
VMCIX: 699
VSCIX: 2,632
VBTIX: 66,066

Roth 1
VTSAX: 40,179 (VSIAX, VMVAX)

Roth 2
VTSAX: 33,003 (VSIAX, VMVAX)

HSA 1
VIIIX: 27,026 (VEMPX,VMVAX,VSMAX, VSIAX)
VEMPX: 6,646

HSA 2
VIIIX: 3,200 (VEMPX,VMVAX,VSMAX, VSIAX)
VEMPX: 764
livesoft
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by livesoft »

I'm sorry but dollar amounts mean almost nothing to me. Can you convert everything to percentages and list the percent first on a line?
Also those ticker symbols are not understood. Somebody else may want expense ratios added, too.

Your
VTSAX: 428,118
...

should be

NN% VTSAX Vanguard Total Stock Market
...

=====
I will say your idea to switch as you described is crazy. Use your brain to avoid wash sales whenever you consider selling in taxable at a loss.
Last edited by livesoft on Sat Feb 17, 2018 5:54 am, edited 1 time in total.
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rkhusky
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rkhusky »

I don't think you need to do that. Just don't buy any VTSAX and VTIAX in your tax advantaged accounts until 31 days have passed since you TLH. And hopefully you haven't bought any of those two in the last 30 days. The next dividend for those two funds is the end of March, so you shouldn't need to worry about dividend reinvestment if you TLH in the next few days.
livesoft
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by livesoft »

rkhusky has the right idea. You only have 2 funds in taxable and there is only overlap with your Roth IRAs. So all those other accounts will not have a chance to interfere with tax-loss harvesting anyways. Since you explicitly control your Roth IRAs, you can easily avoid any wash sales in taxable.

But don't forget the 30 days before thing, too. So don't buy VTSAX in Roth and two days later sell VTSAX in taxable for a loss.

You could change your Roths to not use VTSAX and VTIAX (and whatever you will use for replacement shares (VLCAX, VFWAX ?) in your taxable). The VINIX and VIIIX will not wash with VTSAX nor VLCAX, so they don't need to be changed. You don't have to have 2 funds in each Roth. You could put one different fund in each Roth.
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mega317
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by mega317 »

If you spend too much longer planning your losses will be gone.
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Nate79
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by Nate79 »

You have taxable and Roth IRA to worry about. Shouldn't be too hard to avoid wash sale in these accounts.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

livesoft wrote: Sat Feb 17, 2018 5:40 am I'm sorry but dollar amounts mean almost nothing to me. Can you convert everything to percentages and list the percent first on a line?
Also those ticker symbols are not understood. Somebody else may want expense ratios added, too.

Your
VTSAX: 428,118
...

should be

NN% VTSAX Vanguard Total Stock Market
...

=====
I will say your idea to switch as you described is crazy. Use your brain to avoid wash sales whenever you consider selling in taxable at a loss.
Here you go. Expense ratios nothing crazy high: lowest is 0.02 and highest is 0.11. The ticker symbols in parentheses are the available small/mid cap funds to choose from. I got this idea of switching to small/mid cap to make TLH easier from Physician on Fire on his blog site here: https://www.physicianonfire.com/tax-los ... -vanguard/ You were even mentioned there as the "the resident TLH guru"!!! :beer I have not done TLH before so forgive my mediocrity.

Taxable
30% VTSAX:
24% VTIAX:

401k
16% VITPX: (VSIAX)
4.5% VBMPX

403b
1.34% VINIX (VMCIX, VSCIX)
0.06% VMCIX:
0.24% VSCIX:
10.43% VBTIX:

457b
1% VINIX: (VMCIX, VSCIX)
0.05% VMCIX:
0.18% VSCIX:
4.6% VBTIX:

Roth 1
2.8% VTSAX: (VSIAX, VMVAX)

Roth 2
2.3% VTSAX: (VSIAX, VMVAX)

HSA 1
1.89% VIIIX: (VEMPX,VMVAX,VSMAX, VSIAX)
0.46% VEMPX:

HSA 2
0.22% VIIIX: (VEMPX,VMVAX,VSMAX, VSIAX)
0.05% VEMPX:
Last edited by rhodnius on Sat Feb 17, 2018 8:00 am, edited 1 time in total.
livesoft
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by livesoft »

You can do TLH as follows:

In taxable:
Exchange VTSAX shares with loss (only those with losses, not all of them) into cash.
In 403(b)
Exchange similar amount of VBTIX into an equity fund of your choice. You may wish to rebalance at the same time by buying more equities anyways.

Cash and bonds will have a decently high correlation for the following 31 days (although this time, bonds dropped, so you would have made more money going to cash this time)

And VTSAX will have a decently high correlation to all the equity funds that you have.

At 31 days, you can can exchange back.

Roth 1 can be VSIAX
Roth 2 can be VFSVX or VMVAX.
That is, one fund in each Roth. No need to have two funds in a single Roth unless you absolutely want to.
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Topic Author
rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

livesoft wrote: Sat Feb 17, 2018 5:57 am rkhusky has the right idea. You only have 2 funds in taxable and there is only overlap with your Roth IRAs. So all those other accounts will not have a chance to interfere with tax-loss harvesting anyways. Since you explicitly control your Roth IRAs, you can easily avoid any wash sales in taxable.

But don't forget the 30 days before thing, too. So don't buy VTSAX in Roth and two days later sell VTSAX in taxable for a loss.

You could change your Roths to not use VTSAX and VTIAX (and whatever you will use for replacement shares (VLCAX, VFWAX ?) in your taxable). The VINIX and VIIIX will not wash with VTSAX nor VLCAX, so they don't need to be changed. You don't have to have 2 funds in each Roth. You could put one different fund in each Roth.
Thank you for your reply livesoft resident TLH guru!!! My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: you mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX? Thank you for your Roth IRA suggestions! I will change Roth 1 to VSIAX and Roth 2 to VMVAX
Topic Author
rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

rkhusky wrote: Sat Feb 17, 2018 5:52 am I don't think you need to do that. Just don't buy any VTSAX and VTIAX in your tax advantaged accounts until 31 days have passed since you TLH. And hopefully you haven't bought any of those two in the last 30 days. The next dividend for those two funds is the end of March, so you shouldn't need to worry about dividend reinvestment if you TLH in the next few days.
My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: livesoft mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX?

Thanks!
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

Nate79 wrote: Sat Feb 17, 2018 7:28 am You have taxable and Roth IRA to worry about. Shouldn't be too hard to avoid wash sale in these accounts.
My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: livesoft mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX?
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

The mere presence of a fund does not affect TLH. Only purchases within 30 days on either side of the harvest do. Purchases include new contributions, exchanges from other funds, and reinvested dividends.

VITPX is the Institutional Plus fund that also tracks CRSP US Total Market Index. As I understand it, that does create a wash sale with VTSAX if you had any new VITPX added to the 401k within 30 days of the harvest.

VFIAX, VIIIX, and VINIX are all S&P 500 funds, and would wash with each other, so I'd avoid that entirely in case you want to harvest the VFIAX at some point in the future.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

gostars wrote: Sun Feb 18, 2018 2:17 am The mere presence of a fund does not affect TLH. Only purchases within 30 days on either side of the harvest do. Purchases include new contributions, exchanges from other funds, and reinvested dividends.

VITPX is the Institutional Plus fund that also tracks CRSP US Total Market Index. As I understand it, that does create a wash sale with VTSAX if you had any new VITPX added to the 401k within 30 days of the harvest.

VFIAX, VIIIX, and VINIX are all S&P 500 funds, and would wash with each other, so I'd avoid that entirely in case you want to harvest the VFIAX at some point in the future.
Thank you for your reply. I was reading livesoft's and rhusky's replies and they did not mention that VITPX could affect TLH VTSAX. I should switch my future weekly 401k contributions from VITPX to something else. But another problem would be if I TLH VTSAX and the dividends from VITPX are automatically reinvested within that 30 days.

Given the presence of VITPX in my 401k, VINIX and VIIIX in my 403b/457b and HSAs respectively and possibly using VFIAX as a third TLH partner, I was asking earlier if it makes sense to switch all of them to the available mid and small cap funds. It does make my portfolio heavily tilted to mid and small caps. livesoft seems to think it's a crazy idea. What do you think/suggest me doing?
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Nate79
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by Nate79 »

rhodnius wrote: Sun Feb 18, 2018 1:58 am
Nate79 wrote: Sat Feb 17, 2018 7:28 am You have taxable and Roth IRA to worry about. Shouldn't be too hard to avoid wash sale in these accounts.
My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: livesoft mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX?
My point was that only taxable and IRA accounts are explicitly included in IRS wash sale guidance. 401k, 403b, etc are not.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by livesoft »

rhodnius wrote: Sun Feb 18, 2018 2:57 am ... and they did not mention that VITPX could affect TLH VTSAX.
How would we even know that? You didn't tell us what VITPX was (see my first post in this thread).
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

Nate79 wrote: Sun Feb 18, 2018 9:05 am
rhodnius wrote: Sun Feb 18, 2018 1:58 am
Nate79 wrote: Sat Feb 17, 2018 7:28 am You have taxable and Roth IRA to worry about. Shouldn't be too hard to avoid wash sale in these accounts.
My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: livesoft mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX?
My point was that only taxable and IRA accounts are explicitly included in IRS wash sale guidance. 401k, 403b, etc are not.
So activities in 401ks, 403bs, 457bs and HSAs won't trigger wash sales? If true, that's awesome.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

livesoft wrote: Sun Feb 18, 2018 9:23 am
rhodnius wrote: Sun Feb 18, 2018 2:57 am ... and they did not mention that VITPX could affect TLH VTSAX.
How would we even know that? You didn't tell us what VITPX was (see my first post in this thread).
Sorry, about that. VITPX is Vanguard Institutional Total Stock Market Index Fund Institutional Plus Shares. Per Nate79,is it true that "only taxable and IRA accounts are explicitly included in IRS wash sale guidance. 401k, 403b, etc are not"?
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Nate79
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by Nate79 »

rhodnius wrote: Sun Feb 18, 2018 9:40 am
Nate79 wrote: Sun Feb 18, 2018 9:05 am
rhodnius wrote: Sun Feb 18, 2018 1:58 am
Nate79 wrote: Sat Feb 17, 2018 7:28 am You have taxable and Roth IRA to worry about. Shouldn't be too hard to avoid wash sale in these accounts.
My TLH partners in my taxable will be VLCAX and VFIAX. Some clarifications: livesoft mentioned VINIX & VIIIX will not wash with VTSAX nor VLCAX. Let us say I TLH VTSAX & exchange it to VLCAX and it continues to drop. Will there be a problem if I decide to TLH again into a third partner like VFIAX within 30 days? (since I have VINIX and VIIIX).Also, does the presence of VITPX in the 401k interfere with TLH VTSAX?
My point was that only taxable and IRA accounts are explicitly included in IRS wash sale guidance. 401k, 403b, etc are not.
So activities in 401ks, 403bs, 457bs and HSAs won't trigger wash sales? If true, that's awesome.
Yes, you can search many threads on wash sales. Some people are extremely conservative and count all accounts for wash sales but this is overly conservative in my opinion and counter to IRS guidance.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

Actual text regarding wash sales from IRS publication 550:
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
  1. Buy substantially identical stock or securities,
  2. Acquire substantially identical stock or securities in a fully taxable trade,
  3. Acquire a contract or option to buy substantially identical stock or securities, or
  4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
None of that tells me that 401k and 403b accounts are excluded, and I don't think it's accurate to claim that considering all accounts is counter to IRS guidance when there is no guidance. Opinions are clearly divided on this. If I consider all accounts and the IRS issues definitive guidance that it doesn't apply to a 401k or 403b, then all I've lost is a few minutes of effort to make sure I'm not purchasing anything that might wash. If the IRS issues definitive guidance that wash sales do apply to 401k/403b accounts, then those who didn't take such precautions stand to lose money in the form of losses that are no longer eligible to be claimed, plus all the time and effort required to go back and figure out what was ineligible and file amended returns.
mega317
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by mega317 »

My confusion about this has always been that #1 seems to include any type of trade and makes #2 and #4 redundant.

But by the same token why specify taxable and IRA without including other accounts unless they are actually not included?

I am not worried about future guidance applying retroactively.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rkhusky »

gostars wrote: Sun Feb 18, 2018 7:18 pm Actual text regarding wash sales from IRS publication 550:
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
  1. Buy substantially identical stock or securities,
  2. Acquire substantially identical stock or securities in a fully taxable trade,
  3. Acquire a contract or option to buy substantially identical stock or securities, or
  4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
None of that tells me that 401k and 403b accounts are excluded, and I don't think it's accurate to claim that considering all accounts is counter to IRS guidance when there is no guidance. Opinions are clearly divided on this. If I consider all accounts and the IRS issues definitive guidance that it doesn't apply to a 401k or 403b, then all I've lost is a few minutes of effort to make sure I'm not purchasing anything that might wash. If the IRS issues definitive guidance that wash sales do apply to 401k/403b accounts, then those who didn't take such precautions stand to lose money in the form of losses that are no longer eligible to be claimed, plus all the time and effort required to go back and figure out what was ineligible and file amended returns.
+1
Note the word "buy" in 1 and the word "acquire" in 2-3. They are different words with different meanings. And a seeming redundancy does not negate the assertions. 1 seems pretty clear to me.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

"Trade" in this context means "barter", not trading like buying and selling stock. For example, if you do work for a company and they compensate you in stock instead of cash, that stock you received could trigger a wash sale if you sold other stock in that company within 30 days.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

I hope they make the laws clear regarding 401k/403b/457b/HSAs and wash sale like how congress just blessed Roth IRAs for everyone including high-income folks doing Backdoor Roth IRAs. https://www.forbes.com/sites/ashleaebel ... ce99fc7471
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

Can anybody give me their opinion on this one because it seems like I have not gotten a clear answer yet. I'll be switching the 2 Roth IRAs to small and mid caps for sure since it currently has VTSAX. But let's say I'm going to err on the safe side and consider my 401k/403b/457b and HSAs as a potential wash sale problem: With VITPX in my 401k, VINIX and VIIIX in my 403b/457b and HSAs respectively and possibly using VFIAX as a third TLH partner (I will do VLCAX as my primary TLH partner), is it advisable to switch all of them (accounts with VITPX, VINIX, VIIIX) to mid and small cap funds? It does make my portfolio heavily tilted to mid and small caps. Our current & desired AA is 80/20 stock to bond (56% Domestic / 24% Intl / 20% Bond). Below is the current breakdown. Thanks!

Taxable
30% VTSAX:
24% VTIAX:

401k
16% VITPX
4.5% VBMPX

403b
1.34% VINIX
0.06% VMCIX:
0.24% VSCIX:
10.43% VBTIX:

457b
1% VINIX:
0.05% VMCIX:
0.18% VSCIX:
4.6% VBTIX:

Roth 1
2.8% VTSAX:

Roth 2
2.3% VTSAX:

HSA 1
1.89% VIIIX:
0.46% VEMPX:

HSA 2
0.22% VIIIX:
0.05% VEMPX:
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

Since you have S&P 500 funds in so many places, I would leave that completely out of the TLH equation, and exchange the VITPX in the 401k for whatever S&P 500 fund is available. This leaves you free to TLH VTSAX in taxable with VLCAX. If you need a third partner, consider an ETF instead. ITOT and SCHB each track a different total stock market index from VTSAX and are suitable options. If you're only interested in Vanguard, then VONE is a bit more expensive but should do the trick.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

gostars wrote: Mon Feb 19, 2018 2:49 pm Since you have S&P 500 funds in so many places, I would leave that completely out of the TLH equation, and exchange the VITPX in the 401k for whatever S&P 500 fund is available. This leaves you free to TLH VTSAX in taxable with VLCAX. If you need a third partner, consider an ETF instead. ITOT and SCHB each track a different total stock market index from VTSAX and are suitable options. If you're only interested in Vanguard, then VONE is a bit more expensive but should do the trick.
Thank you for your reply. The problem is VITPX is the only one available. I don't see any S&P 500 equivalent in my 401k plan. Sigh, I guess TLH is not an option for me unless I switch to small and mid caps.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

Post the full list of available funds in the 401k, maybe one of us can find something that will work.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

gostars wrote: Tue Feb 20, 2018 9:52 pm Post the full list of available funds in the 401k, maybe one of us can find something that will work.
Hi gostars!

Thank you for your reply.

Here are the funds available (I excluded the target date funds)

Core:

VITPX
VMMXX
VSIAX
VTSNX
VBMPX

Actively managed:

ANAZX
PIMIX
TPLGX
VDIGX
VEIRX
VEXRX
VAIPX
VWILX
VINEX
VMGRX
VASVX
VWENX
rkhusky
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rkhusky »

Switch your automatic contributions to VMMXX in your 401K. Then TLH VTSAX.

Note that a wash sale doesn't necessarily affect the entire transaction, just the overlap. That is, if you bought 1 share of Fund A in your IRA and then ten days later tax loss harvested 1000 shares of Fund A in your taxable account, there would only be a wash sale of 1 share.

I also note that the only shares of VTSAX that you could have bought with a price higher then yesterday's price would have been purchased in 2018.
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

Switching to VMMXX doesn't make sense since you can't predict when TLH will be useful and the restrictions apply 30 days in both directions. You're likely to lose more by being out of the market than you would ever save by TLH.

None of those funds makes a good equity alternative to VITPX. I guess in that situation I'd either go target date or 100% VBMPX, and then go heavier in stocks in the 403b and 457b to maintain the AA.
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rhodnius
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Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

gostars wrote: Wed Feb 21, 2018 10:38 pm Switching to VMMXX doesn't make sense since you can't predict when TLH will be useful and the restrictions apply 30 days in both directions. You're likely to lose more by being out of the market than you would ever save by TLH.

None of those funds makes a good equity alternative to VITPX. I guess in that situation I'd either go target date or 100% VBMPX, and then go heavier in stocks in the 403b and 457b to maintain the AA.
I agree with your first statement regarding switching to VMMXX. Is there any downside to just switching VITPX to VSIAX in addition to switching my Roth IRAs to small and mid caps? Making my portfolio tilt a bit to small caps won't hurt right?
gostars
Posts: 439
Joined: Mon Oct 09, 2017 7:53 pm

Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by gostars »

Actual market weighting is roughly 80% S&P 500, 20% rest of the market. If you convert your 401k VITPX and Roth VTSAX to mid/small caps, that gives you pretty close to 50/50 weighting between S&P 500 and the rest of the market. That's a massive tilt, and I don't think it makes sense. Here's what I would do:

Taxable: no change

401k
20% VBMPX
.5% VSIAX

403b
12.07% VINIX

457b
1% VMCIX
4.83% VSCIX
(if 457b has VEXAX/VIEIX/VEMPX use 5.83% of that instead)

Roth 1
1.78% VFIAX
1.02% VEXAX

Roth 2
2.3% VFIAX

HSAs unchanged

Going to assume most of your contributions are going towards the 401k. Set your contribution level so that 20% of total annual contributions goes to VBMPX and whatever is left going to the 401k goes to VSIAX. That should keep you roughly balanced, with a tilt towards small. And fewer funds to keep track of.
Topic Author
rhodnius
Posts: 73
Joined: Sat May 30, 2015 5:07 pm

Re: Switching Total Domestic/Large Cap to Small/Mid Cap in Tax-Advantaged Accounts for TLH

Post by rhodnius »

gostars wrote: Thu Feb 22, 2018 11:28 pm Actual market weighting is roughly 80% S&P 500, 20% rest of the market. If you convert your 401k VITPX and Roth VTSAX to mid/small caps, that gives you pretty close to 50/50 weighting between S&P 500 and the rest of the market. That's a massive tilt, and I don't think it makes sense. Here's what I would do:

Taxable: no change

401k
20% VBMPX
.5% VSIAX

403b
12.07% VINIX

457b
1% VMCIX
4.83% VSCIX
(if 457b has VEXAX/VIEIX/VEMPX use 5.83% of that instead)

Roth 1
1.78% VFIAX
1.02% VEXAX

Roth 2
2.3% VFIAX

HSAs unchanged

Going to assume most of your contributions are going towards the 401k. Set your contribution level so that 20% of total annual contributions goes to VBMPX and whatever is left going to the 401k goes to VSIAX. That should keep you roughly balanced, with a tilt towards small. And fewer funds to keep track of.
Thanks for your help gostars! I appreciate it! More power to people like you!!!
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