Adding to investment funds and capital gains

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BuffMaltese
Posts: 12
Joined: Thu Jul 19, 2018 9:30 pm

Adding to investment funds and capital gains

Post by BuffMaltese »

I have investments in a Vanguard taxable account and have been adding at least $2000 a month. Every time I add money to a fund, am I restarting the clock for reaching long-term capital gains tax?

I've was doing dual momentum trading in the taxable account before I realized the tax consequences and additionally I've had a change of heart with risk tolerance for the time being and decided to just put all of the money in the taxable account in 80% tax-exempt bonds (50% VCAIX, 50% VTEAX) and the other 20% in VTSAX. This allocation may change if the market corrects or crashes.
Chip
Posts: 3309
Joined: Wed Feb 21, 2007 4:57 am

Re: Adding to investment funds and capital gains

Post by Chip »

Welcome to the forum!

Each $2000 purchase is its own tax lot with its own capital gains "clock". IF you choose Specific Cost ID, which you should (vs. average cost).
livesoft
Posts: 75166
Joined: Thu Mar 01, 2007 8:00 pm

Re: Adding to investment funds and capital gains

Post by livesoft »

Vanguard.com will tell you which gains and losses are short-term and which gains and losses are long-term. Please take a look and tell us what you see. Just looking should ease your mind and set you straight.

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Even if you have chosen Average Cost, the short and long term shares are still indicated based on their purchase date.
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