Tax loss harvesting - yay or nay?

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Plz
Posts: 42
Joined: Tue Oct 09, 2018 10:26 pm

Tax loss harvesting - yay or nay?

Post by Plz » Tue Oct 23, 2018 2:28 am

Hypothetically, let’s say I bought some VOO in early October and currently have a 6% loss on it. My plan for this position is to hold it forever. Should I:

1) tax loss harvest the -6% and immediately buy the same amount of VTI

2) do nothing and sit on the position

3) is there anything else that needs to be considered?

ivk5
Posts: 459
Joined: Thu Sep 22, 2016 9:05 am

Re: Tax loss harvesting - yay or nay?

Post by ivk5 » Tue Oct 23, 2018 5:43 am

Plz wrote:
Tue Oct 23, 2018 2:28 am
Hypothetically, let’s say I bought some VOO [ivk5: Vanguard 500 ETF] in early October and currently have a 6% loss on it. My plan for this position is to hold it forever. Should I:

1) tax loss harvest the -6% and immediately buy the same amount of VTI [ivk5: Vanguard Total Stock Market ETF]

2) do nothing and sit on the position

3) is there anything else that needs to be considered?
I don't think we can tell you what you "should" do, but I can tell you what I would do and have done: #1.

This assumes there isn't other relevant info withheld that would make this inadvisable, eg if you have sold Vanguard Total Stock Market (ETF/funds) within the last 30 days at a loss. If so, consider another TLH partner, eg Vanguard Large Cap.

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Tax loss harvesting - yay or nay?

Post by livesoft » Tue Oct 23, 2018 6:12 am

Is this held in a taxable account? I'd probably not use VOO in any event, so if one can switch without paying taxes, then I would suggest that one do that.
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Plz
Posts: 42
Joined: Tue Oct 09, 2018 10:26 pm

Re: Tax loss harvesting - yay or nay?

Post by Plz » Tue Oct 23, 2018 6:54 am

ivk5 wrote:
Tue Oct 23, 2018 5:43 am
Plz wrote:
Tue Oct 23, 2018 2:28 am
Hypothetically, let’s say I bought some VOO [ivk5: Vanguard 500 ETF] in early October and currently have a 6% loss on it. My plan for this position is to hold it forever. Should I:

1) tax loss harvest the -6% and immediately buy the same amount of VTI [ivk5: Vanguard Total Stock Market ETF]

2) do nothing and sit on the position

3) is there anything else that needs to be considered?
I don't think we can tell you what you "should" do, but I can tell you what I would do and have done: #1.

This assumes there isn't other relevant info withheld that would make this inadvisable, eg if you have sold Vanguard Total Stock Market (ETF/funds) within the last 30 days at a loss. If so, consider another TLH partner, eg Vanguard Large Cap.
Thanks! Is there any reason not to tax loss harvest? I haven’t sold anything in the last 30 days

Plz
Posts: 42
Joined: Tue Oct 09, 2018 10:26 pm

Re: Tax loss harvesting - yay or nay?

Post by Plz » Tue Oct 23, 2018 6:54 am

livesoft wrote:
Tue Oct 23, 2018 6:12 am
Is this held in a taxable account? I'd probably not use VOO in any event, so if one can switch without paying taxes, then I would suggest that one do that.
Yes, taxable account. Why don’t you like VOO?

stan1
Posts: 5996
Joined: Mon Oct 08, 2007 4:35 pm

Re: Tax loss harvesting - yay or nay?

Post by stan1 » Tue Oct 23, 2018 6:58 am

Plz wrote:
Tue Oct 23, 2018 6:54 am
livesoft wrote:
Tue Oct 23, 2018 6:12 am
Is this held in a taxable account? I'd probably not use VOO in any event, so if one can switch without paying taxes, then I would suggest that one do that.
Yes, taxable account. Why don’t you like VOO?
Why did you choose to buy VOO earlier this month instead of VTI? That reason may help us understand your intent.

Plz
Posts: 42
Joined: Tue Oct 09, 2018 10:26 pm

Re: Tax loss harvesting - yay or nay?

Post by Plz » Tue Oct 23, 2018 7:18 am

stan1 wrote:
Tue Oct 23, 2018 6:58 am
Plz wrote:
Tue Oct 23, 2018 6:54 am
livesoft wrote:
Tue Oct 23, 2018 6:12 am
Is this held in a taxable account? I'd probably not use VOO in any event, so if one can switch without paying taxes, then I would suggest that one do that.
Yes, taxable account. Why don’t you like VOO?
Why did you choose to buy VOO earlier this month instead of VTI? That reason may help us understand your intent.
Slightly less risk and in case I needed to TLH

Bacchus01
Posts: 1929
Joined: Mon Dec 24, 2012 9:35 pm

Re: Tax loss harvesting - yay or nay?

Post by Bacchus01 » Tue Oct 23, 2018 7:30 am

I TLH at every reasonable opportunity

student
Posts: 2575
Joined: Fri Apr 03, 2015 6:58 am

Re: Tax loss harvesting - yay or nay?

Post by student » Tue Oct 23, 2018 7:46 am

I would also TLH.

ivk5
Posts: 459
Joined: Thu Sep 22, 2016 9:05 am

Re: Tax loss harvesting - yay or nay?

Post by ivk5 » Tue Oct 23, 2018 7:57 am

Plz wrote:
Tue Oct 23, 2018 6:54 am
ivk5 wrote:
Tue Oct 23, 2018 5:43 am
I don't think we can tell you what you "should" do, but I can tell you what I would do and have done: #1.

This assumes there isn't other relevant info withheld that would make this inadvisable, eg if you have sold Vanguard Total Stock Market (ETF/funds) within the last 30 days at a loss. If so, consider another TLH partner, eg Vanguard Large Cap.
Thanks! Is there any reason not to tax loss harvest? I haven’t sold anything in the last 30 days
I would do it and have in fact done so as indicated above. It probably makes sense for you to do so as well, but with almost no contextual information about your finances/taxes, I would not be comfortable making a blanket statement that there is not some reason for you not to TLH.

deikel
Posts: 569
Joined: Sat Jan 25, 2014 7:13 pm

Re: Tax loss harvesting - yay or nay?

Post by deikel » Tue Oct 23, 2018 11:09 am

Why would you not ? Whatever your 'loss', you can reduce your taxes by 3k times your tax rate....for as many years as the loss is a multiple of the 3k - no brainer
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dcabler
Posts: 656
Joined: Wed Feb 19, 2014 11:30 am

Re: Tax loss harvesting - yay or nay?

Post by dcabler » Tue Oct 23, 2018 11:17 am

deikel wrote:
Tue Oct 23, 2018 11:09 am
Why would you not ? Whatever your 'loss', you can reduce your taxes by 3k times your tax rate....for as many years as the loss is a multiple of the 3k - no brainer
Agree. Unless you're doing the dreaded "market timing" for TLH by trying to time when it hits bottom. :D
For where I am today, I am using it to further reduce holdings in some funds I no longer want to hold, but for which I don't otherwise want to take a big cap gains hit.

On the other hand I recall getting rid of stock funds in late 2008, thinking that was stupid, then a month later re-buying them. Definitely didn't know what I was doing, but had loss carryovers that lasted for years. :sharebeer No plans to try that again....

northtexan
Posts: 94
Joined: Mon Jul 11, 2016 8:11 pm

Re: Tax loss harvesting - yay or nay?

Post by northtexan » Tue Oct 23, 2018 11:52 am

I did TLH earlier today to help offset some of my "gamble/fun money" short term gains. I believe I was at about 4% over all with losses in VTI and switched to VOO. There are multiple benefits to TLH so I personally would whenever I can and it is not a burden to do so.

ivk5
Posts: 459
Joined: Thu Sep 22, 2016 9:05 am

Re: Tax loss harvesting - yay or nay?

Post by ivk5 » Tue Oct 23, 2018 12:33 pm

One possible reason it might not make sense to harvest losses is if income is temporarily low enough to harvest gains at 0% tax. One might prefer to prioritize harvesting gains.

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