Will this create a wash sale?

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Hulk
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Will this create a wash sale?

Post by Hulk » Fri Oct 26, 2018 11:07 am

Bought VTSAX on 10/17/18. Exchanged into VLCAX on 10/23/18. I would like to TLH again today AND buy more. Can I TLH the VLCAX into say VFIAX and also buy more VTSAX ( or more VFIAX if that makes more sense) today without creating a wash sale? Ultimately, I would prefer to exchange everything into VTSAX for simplicity.

Ill be looking for an opportunity to exchange back into VTSAX, will that begin 30 days after 10/17/18 or 30 days after 10/23/18? Also, will purchasing VTSAX today delay that opportunity? Should I instead buy VFIAX?

Thanks!

livesoft
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Re: Will this create a wash sale?

Post by livesoft » Fri Oct 26, 2018 11:11 am

If you buy more VTSAX in the 30 days after 10/23/2018, then that will create a wash sale, but so what?

You can sell VLCAX today and buy VFIAX based on the info you have presented, but it is possible you did not present all the info.
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Hulk
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Re: Will this create a wash sale?

Post by Hulk » Fri Oct 26, 2018 11:29 am

livesoft wrote:
Fri Oct 26, 2018 11:11 am
If you buy more VTSAX in the 30 days after 10/23/2018, then that will create a wash sale, but so what?

You can sell VLCAX today and buy VFIAX based on the info you have presented, but it is possible you did not present all the info.
What do you mean "so what?"

This is all the relevant info for TSM

livesoft
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Re: Will this create a wash sale?

Post by livesoft » Fri Oct 26, 2018 12:46 pm

A wash sale is not illegal. If you create a wash sale with VTSAX, then you will see how your broker adjusts the basis in your shares and how the 1099-B shows up. Plus, you can always sell the shares later and realize the loss that was temporarily disallowed.

There is really too much misinformation about wash sales and too much worries about this. Try it and tell us about it.

So read Publication 550 all the way through and don't stop reading at the sentence after "wash sale" is mentioned.
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ivk5
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Re: Will this create a wash sale?

Post by ivk5 » Fri Oct 26, 2018 12:50 pm

Best to pick TLH partners you are willing to hold forever. You may not ever get the opportunity to get back to VTSAX without realizing a gain (the market may never be this low again). Why realize a gain unnecessarily?

MotoTrojan
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Re: Will this create a wash sale?

Post by MotoTrojan » Fri Oct 26, 2018 12:51 pm

Hulk wrote:
Fri Oct 26, 2018 11:07 am
Bought VTSAX on 10/17/18. Exchanged into VLCAX on 10/23/18. I would like to TLH again today AND buy more. Can I TLH the VLCAX into say VFIAX and also buy more VTSAX ( or more VFIAX if that makes more sense) today without creating a wash sale? Ultimately, I would prefer to exchange everything into VTSAX for simplicity.

Ill be looking for an opportunity to exchange back into VTSAX, will that begin 30 days after 10/17/18 or 30 days after 10/23/18? Also, will purchasing VTSAX today delay that opportunity? Should I instead buy VFIAX?

Thanks!
I’d harvest into VFIAX and buy more of the same. If the market is down further in mid November you can move it all back to your preferred VTSAX.

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welderwannabe
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Re: Will this create a wash sale?

Post by welderwannabe » Fri Oct 26, 2018 2:06 pm

Hulk wrote:
Fri Oct 26, 2018 11:07 am
Bought VTSAX on 10/17/18. Exchanged into VLCAX on 10/23/18. I would like to TLH again today AND buy more.
Not an expert on wash sales, but the above may have been a wash sale depending the details. The period is 30 days after and BEFORE the sell order. You purchased VTSAX on 10/17 and bought VLCAX on 10/23 so that could be a wash sale.

People smarter than me need to weigh in.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

ivk5
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Re: Will this create a wash sale?

Post by ivk5 » Fri Oct 26, 2018 2:45 pm

welderwannabe wrote:
Fri Oct 26, 2018 2:06 pm
Hulk wrote:
Fri Oct 26, 2018 11:07 am
Bought VTSAX on 10/17/18. Exchanged into VLCAX on 10/23/18. I would like to TLH again today AND buy more.
Not an expert on wash sales, but the above may have been a wash sale depending the details. The period is 30 days after and BEFORE the sell order. You purchased VTSAX on 10/17 and bought VLCAX on 10/23 so that could be a wash sale.

People smarter than me need to weigh in.
Nope. Not substantially identical.

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welderwannabe
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Re: Will this create a wash sale?

Post by welderwannabe » Fri Oct 26, 2018 3:52 pm

ivk5 wrote:
Fri Oct 26, 2018 2:45 pm
welderwannabe wrote:
Fri Oct 26, 2018 2:06 pm
Hulk wrote:
Fri Oct 26, 2018 11:07 am
Bought VTSAX on 10/17/18. Exchanged into VLCAX on 10/23/18. I would like to TLH again today AND buy more.
Not an expert on wash sales, but the above may have been a wash sale depending the details. The period is 30 days after and BEFORE the sell order. You purchased VTSAX on 10/17 and bought VLCAX on 10/23 so that could be a wash sale.

People smarter than me need to weigh in.
Nope. Not substantially identical.
Are you sure? The OP was lacking some detail, hence why I said 'depending on the details'. What if the OP already owned some VTSAX prior to 10/17 and added to the position on 10/17 only to close it out on 10/23? My understanding is that would create a wash sale. No?
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

ivk5
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Re: Will this create a wash sale?

Post by ivk5 » Fri Oct 26, 2018 3:54 pm

No. If you close the position, no wash sale. (Where are the replacement shares for the basis adjustment?)

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welderwannabe
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Re: Will this create a wash sale?

Post by welderwannabe » Fri Oct 26, 2018 4:01 pm

ivk5 wrote:
Fri Oct 26, 2018 3:54 pm
No. If you close the position, no wash sale. (Where are the replacement shares for the basis adjustment?)
Ok, can you provide a scenario where purchasing an identical security 30 days before the sale would be a wash sale then?

Edit: I think I figured it out. Had he done a partial exchange then it would have triggered a wash sale. Closing out the entire position makes it a non issue (assuming he/she exchange all shares).
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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

Re: Will this create a wash sale?

Post by ivk5 » Sat Oct 27, 2018 12:46 am

welderwannabe wrote:
Fri Oct 26, 2018 4:01 pm
ivk5 wrote:
Fri Oct 26, 2018 3:54 pm
No. If you close the position, no wash sale. (Where are the replacement shares for the basis adjustment?)
Ok, can you provide a scenario where purchasing an identical security 30 days before the sale would be a wash sale then?

Edit: I think I figured it out. Had he done a partial exchange then it would have triggered a wash sale. Closing out the entire position makes it a non issue (assuming he/she exchange all shares).
Bingo.

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