Tax loss harvest VTSAX -> VLCAX or VFIAX

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Topic Author
ishkadetto
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Joined: Thu May 24, 2018 2:49 pm
Location: California, USA

Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by ishkadetto »

Background: Currently sitting on ~$16k of losses in VTSAX (Vanguard Total US Stock Index), total position is ~$300k. In 24% fed tax bracket, 9.3% state.

I have tax loss harvested in the past so I understand the mechanics, but when I did that it was with my international fund so I felt more.. indifferent I guess if I were to get "stuck" in VFWAX (Vanguard All-World ex-US Index) vs VTIAX (Vanguard Total International Index). I ended up being able to make a round-trip (twice) so that wasn't an issue.

I think because this VTSAX position is so much bigger dollar-wise, and a bigger percentage of my overall portfolio (~33%), it's more anxiety-inducing to think of a third of my money being "stuck" in the not-best fund .... so I'm waffling back and forth on whether or not to do it. And I already have 5 years worth of 3k/year losses to deduct on my taxes from my prior TLH of international if that matters.

Pros for VFIAX: lower ER (0.4% vs 0.5%)
Pros for VLCAX: more companies (612 vs 511), closest to VTSAX when put in Portfolio Visualizer

Then, if I do decide to harvest losses today... is there an easy way to know which shares will be at a loss if the market closes with a gain today, since I have to place the trade before 4pm? Could I look at VTI and see how much it's up at that point and multiply by that to estimate today's closing of VTSAX (or does it not work like that)?

Any wisdom/advice is appreciated!
Last edited by ishkadetto on Tue Dec 18, 2018 1:06 pm, edited 1 time in total.
livesoft
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Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by livesoft »

Use both. :twisted:

I sold VTSAX in April 2009 and bought VLCAX. I still own all those VLCAX shares. I didn't mind. I buy mid/small-cap ETFs, too. I still have VBR bought around that time, too. My spouse uses VFIAX in her 401(k).

Don't get caught up in all the crap about the 3-fund portfolio that is tossed around here. You can mimic the 3-fund portfolio with 4, 5, 6, or 20 funds. Most people don't have the luxury in their 403(b)s or 401(k)s to have a "pure" portfolio anyways. You don't need purity.
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mhc
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Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by mhc »

ERs are 0.04% and 0.05%. Both are so small. I don't think it really matters.

Either fund choice is fine. Choose one and move on. You may be TLH again before the year is up.
retiringwhen
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Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by retiringwhen »

Tomato / Tomahto or something like that.

I use both as well.

My 401(K) has the CIT version of 500 Index fund with the Extended Market Fund as the total stock market fund alternative instead of VTSAX. So I use it there (the largest single investment we have).

So I have been using VLCAX and VSMAX as my TLH partner (did a couple round trips this year.) for the taxable funds.

Just yesterday, I did a TLH swap and got cute. I was also holding VTSAX in an IRA and hadn't touched it all year while still holding VTSAX in taxable. I split VLCAX in half and use the the Growth Index (VIGAX) and Value Index funds (VVIAX) to put the high dividend funds in my IRA and put the Growth funds in taxable hoping to make a long-term tax arbitrage. Of course, I am hoping I don't have any more opportunities to Tax-loss harvest to get that result.

See: viewtopic.php?f=1&t=266511

We'll see how that works out in the end.....

I have decided to follow the 3-fund model in spirit if not in fact. I really want to own un-tilted total stock market funds for the US and international. It can easily be done with two or three funds as necessary, although I have questioned the need for the small-cap completion funds at times, I still buy them...
Topic Author
ishkadetto
Posts: 63
Joined: Thu May 24, 2018 2:49 pm
Location: California, USA

Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by ishkadetto »

Well, I did it! VTSAX -> VLCAX today. And with the tiny drop in the market, I didn't even need to stress about the possibility of the share price going up in the time between hitting the exchange button and close price at the end of day :D
MotoTrojan
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Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by MotoTrojan »

ishkadetto wrote: Tue Dec 18, 2018 4:38 pm Well, I did it! VTSAX -> VLCAX today. And with the tiny drop in the market, I didn't even need to stress about the possibility of the share price going up in the time between hitting the exchange button and close price at the end of day :D
Congrats! I just went to VFIAX, but only because I recently went from VV to VTSAX :).

Previously had only used ETFs but man is it nice/easy to TLH with Mutual Funds.
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Artsdoctor
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Re: Tax loss harvest VTSAX -> VLCAX or VFIAX

Post by Artsdoctor »

livesoft wrote: Tue Dec 18, 2018 1:05 pm Use both. :twisted:

I sold VTSAX in April 2009 and bought VLCAX. I still own all those VLCAX shares. I didn't mind. I buy mid/small-cap ETFs, too. I still have VBR bought around that time, too. My spouse uses VFIAX in her 401(k).

Don't get caught up in all the crap about the 3-fund portfolio that is tossed around here. You can mimic the 3-fund portfolio with 4, 5, 6, or 20 funds. Most people don't have the luxury in their 403(b)s or 401(k)s to have a "pure" portfolio anyways. You don't need purity.
Hmm. . . . I wonder if we bought those VLCAX shares on the same day . . . If I'm not mistaken, I think those shares have appreciated the most of any other shares I have from any fund.
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