TLH - VTIAX to VFWAX

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spidercharm
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Joined: Tue Feb 09, 2010 6:25 pm

TLH - VTIAX to VFWAX

Post by spidercharm » Mon Oct 22, 2018 6:42 pm

I am considering moving from VTIAX to VFWAX for TLH. I have about 7k in loss.

- Is this reasonable for tax purposes given the wash sale rules?
- VFWAX has significantly less number of stocks, so it seems I am taking a risk in going to less diversified fund. Although I know both generally tracked each other well in the past, there is no way to predict if they will continue to do so. If there are better options, please tell me.
- I haven't done this in a while. For 7k loss, I think I can deduct 3k in 2018, 3k in 2019 and 1k in 2020, correct?
- All of 7k appears in short-term column. Does that matter?
- Anything to consider for timing or should I do it ASAP?
- If I want to move back to VTIAX, how long do I have to wait after moving out of it?

Thanks in advance.
Last edited by spidercharm on Mon Oct 22, 2018 7:02 pm, edited 3 times in total.

stocknoob4111
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Re: TLH - VTIAX to VFWAX

Post by stocknoob4111 » Mon Oct 22, 2018 6:55 pm

I just did this 3 months ago, now I am going to do it again back to VTIAX to capture an additional $6k in losses.

spidercharm
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Re: TLH - VTIAX to VFWAX

Post by spidercharm » Tue Oct 23, 2018 6:38 pm

Anyone with additional thoughts on my questions.

Thanks for your help in advance.

stan1
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Re: TLH - VTIAX to VFWAX

Post by stan1 » Tue Oct 23, 2018 6:51 pm

You could use an ETF such as IXUS instead of a large cap fund/ETF. I know you will probably say you don't want to use an ETF, but you asked what other alternatives are available that keep you in a total international position so I'm giving you a good one that has no trading cost at Vanguard.

spidercharm
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Re: TLH - VTIAX to VFWAX

Post by spidercharm » Tue Oct 23, 2018 7:30 pm

One problem with ETF is that I can't reinvest at the same time as sale transaction. Trade has to settle which means I will be out of market for couple of days.

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Cycle
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Location: USA

Re: TLH - VTIAX to VFWAX

Post by Cycle » Tue Oct 23, 2018 7:35 pm

stocknoob4111 wrote:
Mon Oct 22, 2018 6:55 pm
I just did this 3 months ago, now I am going to do it again back to VTIAX to capture an additional $6k in losses.
Same. But 1.5 months

spidercharm
Posts: 53
Joined: Tue Feb 09, 2010 6:25 pm

Re: TLH - VTIAX to VFWAX

Post by spidercharm » Tue Oct 23, 2018 7:47 pm

Cycle wrote:
Tue Oct 23, 2018 7:35 pm
stocknoob4111 wrote:
Mon Oct 22, 2018 6:55 pm
I just did this 3 months ago, now I am going to do it again back to VTIAX to capture an additional $6k in losses.
Same. But 1.5 months
So, when can I officially get back? 30 days - business or calendar days?

Also, I have biweekly contributions in 401k going to FSGGX (Fidelity® Global ex US Index Instl Prem) and FSPSX (Fidelity® International Index InstlPrm) in my own and spouse accounts. Does that cause any issues with wash sale?

stocknoob4111
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Re: TLH - VTIAX to VFWAX

Post by stocknoob4111 » Tue Oct 23, 2018 9:17 pm

spidercharm wrote:
Tue Oct 23, 2018 7:47 pm
So, when can I officially get back? 30 days - business or calendar days?

Also, I have biweekly contributions in 401k going to FSGGX (Fidelity® Global ex US Index Instl Prem) and FSPSX (Fidelity® International Index InstlPrm) in my own and spouse accounts. Does that cause any issues with wash sale?
You cannot repurchase the same security within the 60 day window, 30 days before and 30 days after... so if you TLH to VFWAX then you can't come back to VTIAX (or purchase anything substantially similar to VTIAX) for at least 30 days. Per the IRS website it says 30 calendar days.

I don't know those specific funds, perhaps someone else can comment on that but just a cursory look at it FSPSX cannot compare with VTIAX as the latter has 20% EM and the former has no EM at all so I think you're in the clear with that (although I would re-confirm with others). FSGGX does not seem substantially identical to me (different benchmark, more overweight EM in FSGGX etc.) so that may not be an issue either.

assyadh
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Re: TLH - VTIAX to VFWAX

Post by assyadh » Tue Oct 23, 2018 9:40 pm

spidercharm wrote:
Tue Oct 23, 2018 7:30 pm
One problem with ETF is that I can't reinvest at the same time as sale transaction. Trade has to settle which means I will be out of market for couple of days.

I believe this is false. You can reinvest. You just have to be sure that the cash is going to be there when the trade settles.

desiderium
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Re: TLH - VTIAX to VFWAX

Post by desiderium » Wed Oct 24, 2018 8:32 am

spidercharm wrote:
Mon Oct 22, 2018 6:42 pm
I am considering moving from VTIAX to VFWAX for TLH. I have about 7k in loss.

- Is this reasonable for tax purposes given the wash sale rules?
---Yes
- VFWAX has significantly less number of stocks, so it seems I am taking a risk in going to less diversified fund. Although I know both generally tracked each other well in the past, there is no way to predict if they will continue to do so. If there are better options, please tell me.
---You sound highly diversified, so this is being overly worried, IMO
- I haven't done this in a while. For 7k loss, I think I can deduct 3k in 2018, 3k in 2019 and 1k in 2020, correct?
---First, the losses are used to offset any capital gains you have this year. Then up to 3k can be used to offset income per year. Leftover losses are rolled over to the next year
- All of 7k appears in short-term column. Does that matter?
---No, short term are versatile, but yes. See recent posts by livesoft for clarity on this
- Anything to consider for timing or should I do it ASAP?
---I would take it now. If you have further losses you can always TLH again, or TLH when you move back to VTIAX
- If I want to move back to VTIAX, how long do I have to wait after moving out of it?
---more than 30 days

Thanks in advance.

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Earl Lemongrab
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Re: TLH - VTIAX to VFWAX

Post by Earl Lemongrab » Wed Oct 24, 2018 6:12 pm

assyadh wrote:
Tue Oct 23, 2018 9:40 pm
spidercharm wrote:
Tue Oct 23, 2018 7:30 pm
One problem with ETF is that I can't reinvest at the same time as sale transaction. Trade has to settle which means I will be out of market for couple of days.
I believe this is false. You can reinvest. You just have to be sure that the cash is going to be there when the trade settles.
Yeah, you can normally buy with unsettled funds. You just can't sell what you bought until the settlement period is complete. Unless you have a margin account.
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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