TLH recent lots < 30 days after purchase

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blackburnian
Posts: 78
Joined: Thu May 04, 2017 12:40 pm

TLH recent lots < 30 days after purchase

Post by blackburnian » Fri Oct 26, 2018 8:03 am

Bogleheads, I apologize for asking a question that I'm sure has been answered numerous times. However I have not been able find the relevant threads. The question is: If I have bought several lots of a fund and want to sell the last two or three, which have losses, can I do so without triggering a wash sale? I believe that to be the case, but I wanted to double check. Here is the scenario:

A: 9/30/18: buy 100 sh @ 25
B: 10/1/18: buy 100 sh @ 20
C: 10/5/18: buy 100 sh @ 25
D: 10/8/18: buy 100 sh @ 25
E: 10/15/18: buy 100 sh @ 25

On 10/20/18, the fund is at $22/sh: all lots except B have losses. I know if I sell A, C, D, and E, that will trigger a wash sale, with cost basis increased for B. But can I sell C, D, and E without triggering a wash sale (as long as I do not buy any new lots for 31 days)?

Thanks.
Last edited by blackburnian on Fri Oct 26, 2018 8:19 am, edited 1 time in total.

magicrat
Posts: 520
Joined: Sat Nov 29, 2014 7:04 pm

Re: TLH recent lots < 30 days after purchase

Post by magicrat » Fri Oct 26, 2018 8:08 am

blackburnian wrote:
Fri Oct 26, 2018 8:03 am
Bogleheads, I apologize for asking a question that I'm sure has been answered numerous times. However I have not been able find the relevant threads. The question is: If I have bought several lots of a fund and want to sell the last two or three, which have losses, can I do so without triggering a wash sale? I believe that to be the case, but I wanted to double check. Here is the scenario:

A: 9/30/18: buy 100 sh @ 25
B: 10/1/18: buy 100 sh @ 20
C: 10/5/18: buy 100 sh @ 25
D: 10/8/18: buy 100 sh @ 25
E: 10/15/18: buy 100 sh @ 25

On 10/20/18, the fund is at $22/sh: all lots except B have losses. I know if I sell A, C, D, and E, that will trigger a wash sale, with cost basis increased for B. But call I sell C, D, and E without triggering a wash sale (as long as I do not buy any new lots for 31 days)?

Thanks.
No. A & B would be replacement shares.

MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 8:12 am

blackburnian wrote:
Fri Oct 26, 2018 8:03 am
Bogleheads, I apologize for asking a question that I'm sure has been answered numerous times. However I have not been able find the relevant threads. The question is: If I have bought several lots of a fund and want to sell the last two or three, which have losses, can I do so without triggering a wash sale? I believe that to be the case, but I wanted to double check. Here is the scenario:

A: 9/30/18: buy 100 sh @ 25
B: 10/1/18: buy 100 sh @ 20
C: 10/5/18: buy 100 sh @ 25
D: 10/8/18: buy 100 sh @ 25
E: 10/15/18: buy 100 sh @ 25

On 10/20/18, the fund is at $22/sh: all lots except B have losses. I know if I sell A, C, D, and E, that will trigger a wash sale, with cost basis increased for B. But call I sell C, D, and E without triggering a wash sale (as long as I do not buy any new lots for 31 days)?

Thanks.
All in same account? If so, sell all but B and let the broker adjust the basis on B. Nothing to be afraid of.

kotsp
Posts: 28
Joined: Sun Jan 14, 2018 9:32 pm

Re: TLH recent lots < 30 days after purchase

Post by kotsp » Fri Oct 26, 2018 8:59 am

MotoTrojan wrote:
Fri Oct 26, 2018 8:12 am
blackburnian wrote:
Fri Oct 26, 2018 8:03 am
Bogleheads, I apologize for asking a question that I'm sure has been answered numerous times. However I have not been able find the relevant threads. The question is: If I have bought several lots of a fund and want to sell the last two or three, which have losses, can I do so without triggering a wash sale? I believe that to be the case, but I wanted to double check. Here is the scenario:

A: 9/30/18: buy 100 sh @ 25
B: 10/1/18: buy 100 sh @ 20
C: 10/5/18: buy 100 sh @ 25
D: 10/8/18: buy 100 sh @ 25
E: 10/15/18: buy 100 sh @ 25

On 10/20/18, the fund is at $22/sh: all lots except B have losses. I know if I sell A, C, D, and E, that will trigger a wash sale, with cost basis increased for B. But call I sell C, D, and E without triggering a wash sale (as long as I do not buy any new lots for 31 days)?

Thanks.
All in same account? If so, sell all but B and let the broker adjust the basis on B. Nothing to be afraid of.
In my understanding, you cannot sell any lots (A,B,C,D,E) without them being considered as "wash sale" by IRS. This is because all lots are brought within past 30 days period (assuming you sell them today).

stupidkid
Posts: 155
Joined: Wed Oct 12, 2011 7:11 pm

Re: TLH recent lots < 30 days after purchase

Post by stupidkid » Fri Oct 26, 2018 9:08 am

This is a timely thread, I had the same question as I did not understand the "30 days before" part of a wash sale.

I also recently purchased shares which now have a loss - purchased after performing a TLH transaction. If I understand the replies here - I must hold onto the recently purchased shares for at least 30 days?

MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 9:22 am

kotsp wrote:
Fri Oct 26, 2018 8:59 am
MotoTrojan wrote:
Fri Oct 26, 2018 8:12 am
blackburnian wrote:
Fri Oct 26, 2018 8:03 am
Bogleheads, I apologize for asking a question that I'm sure has been answered numerous times. However I have not been able find the relevant threads. The question is: If I have bought several lots of a fund and want to sell the last two or three, which have losses, can I do so without triggering a wash sale? I believe that to be the case, but I wanted to double check. Here is the scenario:

A: 9/30/18: buy 100 sh @ 25
B: 10/1/18: buy 100 sh @ 20
C: 10/5/18: buy 100 sh @ 25
D: 10/8/18: buy 100 sh @ 25
E: 10/15/18: buy 100 sh @ 25

On 10/20/18, the fund is at $22/sh: all lots except B have losses. I know if I sell A, C, D, and E, that will trigger a wash sale, with cost basis increased for B. But call I sell C, D, and E without triggering a wash sale (as long as I do not buy any new lots for 31 days)?

Thanks.
All in same account? If so, sell all but B and let the broker adjust the basis on B. Nothing to be afraid of.
In my understanding, you cannot sell any lots (A,B,C,D,E) without them being considered as "wash sale" by IRS. This is because all lots are brought within past 30 days period (assuming you sell them today).
You are incorrect. When you sell the shares all at once they are not disallowed shares. If you sold them one by one, it would be a temporary wash sale, but would be offset when sold due to increased basis. People frequently will harvest TSM to Large-cap and then within 30 days if the market drops more harvest the Large-cap into S&P500.

If you sell them all at once in Vanguard you are golden though.

MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 9:22 am

stupidkid wrote:
Fri Oct 26, 2018 9:08 am
This is a timely thread, I had the same question as I did not understand the "30 days before" part of a wash sale.

I also recently purchased shares which now have a loss - purchased after performing a TLH transaction. If I understand the replies here - I must hold onto the recently purchased shares for at least 30 days?
Nope.

stupidkid
Posts: 155
Joined: Wed Oct 12, 2011 7:11 pm

Re: TLH recent lots < 30 days after purchase

Post by stupidkid » Fri Oct 26, 2018 11:19 am

MotoTrojan wrote:
Fri Oct 26, 2018 9:22 am
Nope.
"Nope" as in I <can> sell these recently purchased shares?

I purchased shares on 10/05/2018 and 10/15/2018 in a few funds which have since declined further. I can sell those lots to TLH and buy a partner fund and that won't be a wash sale?

MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 12:26 pm

stupidkid wrote:
Fri Oct 26, 2018 11:19 am
MotoTrojan wrote:
Fri Oct 26, 2018 9:22 am
Nope.
"Nope" as in I <can> sell these recently purchased shares?

I purchased shares on 10/05/2018 and 10/15/2018 in a few funds which have since declined further. I can sell those lots to TLH and buy a partner fund and that won't be a wash sale?
Correct, as long as you sell all shares bought in the last 31 days. If multiple lots it’s possible vanguard will adjust the basis of some (wash sale) but by selling the adjusted shares you aren’t actually generating one so ignore it, they did the math for you . If only one lot, you won’t see anything at all.

Sorry you missed the low today.

stupidkid
Posts: 155
Joined: Wed Oct 12, 2011 7:11 pm

Re: TLH recent lots < 30 days after purchase

Post by stupidkid » Fri Oct 26, 2018 12:35 pm

MotoTrojan wrote:
Fri Oct 26, 2018 12:26 pm
stupidkid wrote:
Fri Oct 26, 2018 11:19 am
MotoTrojan wrote:
Fri Oct 26, 2018 9:22 am
Nope.
"Nope" as in I <can> sell these recently purchased shares?

I purchased shares on 10/05/2018 and 10/15/2018 in a few funds which have since declined further. I can sell those lots to TLH and buy a partner fund and that won't be a wash sale?
Correct, as long as you sell all shares bought in the last 31 days. If multiple lots it’s possible vanguard will adjust the basis of some (wash sale) but by selling the adjusted shares you aren’t actually generating one so ignore it, they did the math for you . If only one lot, you won’t see anything at all.

Sorry you missed the low today.
Thanks! I'm still unclear at what the 30 day before rule is then but good to know I can sell. And oh well on not selling at the bottom, a little less loss is ok...

MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 12:43 pm

stupidkid wrote:
Fri Oct 26, 2018 12:35 pm
MotoTrojan wrote:
Fri Oct 26, 2018 12:26 pm
stupidkid wrote:
Fri Oct 26, 2018 11:19 am
MotoTrojan wrote:
Fri Oct 26, 2018 9:22 am
Nope.
"Nope" as in I <can> sell these recently purchased shares?

I purchased shares on 10/05/2018 and 10/15/2018 in a few funds which have since declined further. I can sell those lots to TLH and buy a partner fund and that won't be a wash sale?
Correct, as long as you sell all shares bought in the last 31 days. If multiple lots it’s possible vanguard will adjust the basis of some (wash sale) but by selling the adjusted shares you aren’t actually generating one so ignore it, they did the math for you . If only one lot, you won’t see anything at all.

Sorry you missed the low today.
Thanks! I'm still unclear at what the 30 day before rule is then but good to know I can sell. And oh well on not selling at the bottom, a little less loss is ok...
You can’t have any shares left over, so if some were a gain and others a loss it prevents you from selling the losers and not getting penalized. Also prevents you from buying in your Roth, then harvesting the same index in taxable a few days/weeks later. Make sense?

livesoft
Posts: 62931
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH recent lots < 30 days after purchase

Post by livesoft » Fri Oct 26, 2018 12:50 pm

MotoTrojan wrote:
Fri Oct 26, 2018 12:43 pm
... it prevents you from selling the losers and not getting penalized. Also prevents you from buying in your Roth, then harvesting the same index in taxable a few days/weeks later. Make sense?
What exactly is the penalty? ;)
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MotoTrojan
Posts: 2611
Joined: Wed Feb 01, 2017 8:39 pm

Re: TLH recent lots < 30 days after purchase

Post by MotoTrojan » Fri Oct 26, 2018 12:58 pm

livesoft wrote:
Fri Oct 26, 2018 12:50 pm
MotoTrojan wrote:
Fri Oct 26, 2018 12:43 pm
... it prevents you from selling the losers and not getting penalized. Also prevents you from buying in your Roth, then harvesting the same index in taxable a few days/weeks later. Make sense?
What exactly is the penalty? ;)
A reduced basis which means more potential taxes in the future. Surely you’d prefer to not have the reduced basis, right?

livesoft
Posts: 62931
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH recent lots < 30 days after purchase

Post by livesoft » Fri Oct 26, 2018 1:01 pm

The basis is NOT reduced with a wash sale. Instead the basis is INCREASED.
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stupidkid
Posts: 155
Joined: Wed Oct 12, 2011 7:11 pm

Re: TLH recent lots < 30 days after purchase

Post by stupidkid » Fri Oct 26, 2018 1:20 pm

MotoTrojan wrote:
Fri Oct 26, 2018 12:43 pm
You can’t have any shares left over, so if some were a gain and others a loss it prevents you from selling the losers and not getting penalized. Also prevents you from buying in your Roth, then harvesting the same index in taxable a few days/weeks later. Make sense?
So you have to sell <all> the shares in the pre-30 day period? Also, the buying/selling in different accounts makes sense, thanks!

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