Tax Loss Harvesting

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
stillers
Posts: 46
Joined: Sun Apr 23, 2017 7:48 am

Tax Loss Harvesting

Post by stillers » Mon Jan 07, 2019 5:07 pm

Well I made a huge mistake so thought I would share my misfortune and possibly prevent someone else making this mistake. I did tax loss harvesting in Vanguard after tax account of my trust and my wife's trust. My transactions did one at a time and went great. When doing the process for my wife it appeared COULD DO MULTIPLE TRANSACTIONS AT A TIME. I mistakenly did a 374,000 long term gain sale in 2018. This year will pay 20% plus 3.8% medicare tax because of my income. Called Vanguard and CPA and they say nothing to do about the blunder. Any suggestions or advice to make me feel less like an idiot appreciated.
STILLERS

Hockey10
Posts: 533
Joined: Wed Aug 24, 2016 12:20 pm
Location: Philadelphia suburbs

Re: Tax Loss Harvesting

Post by Hockey10 » Mon Jan 07, 2019 5:17 pm

I don't think that even livesoft will be able to help you out with this one. Look at the bright side, you had a very nice gain. Pay the taxes, learn from your mistake, and move on.

H-Town
Posts: 1895
Joined: Sun Feb 26, 2017 2:08 pm

Re: Tax Loss Harvesting

Post by H-Town » Mon Jan 07, 2019 5:19 pm

It happened. Nothing you can do now. Just move on. Next time, triple check thing before hitting the Submit button.

BoggledHead2
Posts: 147
Joined: Tue Jun 12, 2018 6:50 pm

Re: Tax Loss Harvesting

Post by BoggledHead2 » Mon Jan 07, 2019 5:21 pm

You have a trust
Your wife has a trust
You’re upset about the fact you have to now pay tax on a large sum of money your investments earned.

You’re fine.

User avatar
TomatoTomahto
Posts: 9051
Joined: Mon Apr 11, 2011 1:48 pm

Re: Tax Loss Harvesting

Post by TomatoTomahto » Mon Jan 07, 2019 5:31 pm

For a number of reasons (profoundly uncooperative mortgage company, timing of employment, needing to buy before selling), we had to raise a large amount of cash in 2018. That resulted in a mid six digit LTCG, subject to taxes at the same rates as you. As you know, the market tanked later in the year, and we managed to TLH half of the LTCGs away. I'll leave it to you to decide whether that was good news or bad news :oops:

In any case, CG rates are lower than income rates. The glass is half full.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Topic Author
stillers
Posts: 46
Joined: Sun Apr 23, 2017 7:48 am

Re: Tax Loss Harvesting

Post by stillers » Mon Jan 07, 2019 5:38 pm

Well I am off the roof and having a beer. I of course do not like to pay more tax than needed but what a dumb mistake!!!
Thanks for the encouragement bogleheads.
Stillers :sharebeer

bradpevans
Posts: 544
Joined: Sun Apr 08, 2018 1:09 pm

Re: Tax Loss Harvesting

Post by bradpevans » Mon Jan 07, 2019 7:13 pm

stillers wrote:
Mon Jan 07, 2019 5:07 pm
Well I made a huge mistake so thought I would share my misfortune and possibly prevent someone else making this mistake. I did tax loss harvesting in Vanguard after tax account of my trust and my wife's trust. My transactions did one at a time and went great. When doing the process for my wife it appeared COULD DO MULTIPLE TRANSACTIONS AT A TIME. I mistakenly did a 374,000 long term gain sale in 2018. This year will pay 20% plus 3.8% medicare tax because of my income. Called Vanguard and CPA and they say nothing to do about the blunder. Any suggestions or advice to make me feel less like an idiot appreciated.
STILLERS
Are you retired but pre-RMD.? That gain could fund a lot of Roth conversion if applicable ...

libralibra
Posts: 345
Joined: Sat Jul 30, 2011 2:01 pm

Re: Tax Loss Harvesting

Post by libralibra » Tue Jan 08, 2019 12:52 am

post removed
Last edited by libralibra on Mon May 27, 2019 11:14 pm, edited 1 time in total.

User avatar
TomatoTomahto
Posts: 9051
Joined: Mon Apr 11, 2011 1:48 pm

Re: Tax Loss Harvesting

Post by TomatoTomahto » Tue Jan 08, 2019 6:17 am

libralibra wrote:
Tue Jan 08, 2019 12:52 am
I'm not sure how someone overlooks something like this. How do you know there wasn't a glitch? E.g. you thought you clicked on one lot but internally it selected a different lot? Did they have an intermediate confirmation page which you remember seeing what the sales and gain/loss was expected to be?
It happens. The other day, I sold a bunch of Treasury MM to buy . . . a bunch of Treasury MM. I had intended to move it to Muni MM. Sometimes the eye sees what it expects to see (eg., Invisible Gorilla http://www.theinvisiblegorilla.com/videos.html).

It pays to slow down. Not easy for some personality types to do.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Longdog
Posts: 1325
Joined: Sun Feb 09, 2014 6:56 pm
Location: Philadelphia

Re: Tax Loss Harvesting

Post by Longdog » Tue Jan 08, 2019 7:45 am

stillers wrote:
Mon Jan 07, 2019 5:07 pm
Well I made a huge mistake so thought I would share my misfortune and possibly prevent someone else making this mistake. I did tax loss harvesting in Vanguard after tax account of my trust and my wife's trust. My transactions did one at a time and went great. When doing the process for my wife it appeared COULD DO MULTIPLE TRANSACTIONS AT A TIME. I mistakenly did a 374,000 long term gain sale in 2018. This year will pay 20% plus 3.8% medicare tax because of my income. Called Vanguard and CPA and they say nothing to do about the blunder. Any suggestions or advice to make me feel less like an idiot appreciated.
STILLERS
What does doing MULTIPLE TRANSACTIONS AT A TIME have to do with mistakenly generating $374,000 in long term gains? What was the actual mistake (i.e., what did you intend to do and what did you do instead)? What will you do differently in the future? I cannot tell what lesson was learned.
Steve

Topic Author
stillers
Posts: 46
Joined: Sun Apr 23, 2017 7:48 am

Re: Tax Loss Harvesting

Post by stillers » Tue Jan 08, 2019 10:57 pm

Well I made a mistake and the lesson is to pay more attention , the why and where of this are not pertinent to this discussion but I accept the responsibility for this. The account is a after tax account and my question is any suggestion to soften the blow?
STILLERS

User avatar
TomatoTomahto
Posts: 9051
Joined: Mon Apr 11, 2011 1:48 pm

Re: Tax Loss Harvesting

Post by TomatoTomahto » Wed Jan 09, 2019 6:13 am

stillers wrote:
Tue Jan 08, 2019 10:57 pm
Well I made a mistake and the lesson is to pay more attention , the why and where of this are not pertinent to this discussion but I accept the responsibility for this. The account is a after tax account and my question is any suggestion to soften the blow?
STILLERS
I apologize on behalf of some of the responders; apparently well-off people aren’t allowed to make mistakes like the rest of the world. BH are quick to jump into class warfare mode.

My suggestion to soften the blow is to reframe the mistake. In my case, how lucky to have enough not to be subject to a mortgage company’s quirks and to be able to reset our taxable basis. Still sucks, but it made me feel better. And then, at the end of 2018, how fortuitous to be able to TLH some of the LTCG away using STCL.

I don’t know any real way to soften the blow, but framing matters.
Okay, I get it; I won't be political or controversial. The Earth is flat.

libralibra
Posts: 345
Joined: Sat Jul 30, 2011 2:01 pm

Re: Tax Loss Harvesting

Post by libralibra » Wed Jan 09, 2019 1:36 pm

post removed
Last edited by libralibra on Fri May 31, 2019 10:47 pm, edited 1 time in total.

Topic Author
stillers
Posts: 46
Joined: Sun Apr 23, 2017 7:48 am

Re: Tax Loss Harvesting

Post by stillers » Wed Jan 09, 2019 11:13 pm

Thank you
Stillers

fnhanks
Posts: 9
Joined: Sun Dec 30, 2018 11:30 am

Re: Tax Loss Harvesting

Post by fnhanks » Thu Jan 10, 2019 11:48 pm

Longdog wrote:
Tue Jan 08, 2019 7:45 am
stillers wrote:
Mon Jan 07, 2019 5:07 pm
Well I made a huge mistake so thought I would share my misfortune and possibly prevent someone else making this mistake. I did tax loss harvesting in Vanguard after tax account of my trust and my wife's trust. My transactions did one at a time and went great. When doing the process for my wife it appeared COULD DO MULTIPLE TRANSACTIONS AT A TIME. I mistakenly did a 374,000 long term gain sale in 2018. This year will pay 20% plus 3.8% medicare tax because of my income. Called Vanguard and CPA and they say nothing to do about the blunder. Any suggestions or advice to make me feel less like an idiot appreciated.
STILLERS
What does doing MULTIPLE TRANSACTIONS AT A TIME have to do with mistakenly generating $374,000 in long term gains? What was the actual mistake (i.e., what did you intend to do and what did you do instead)? What will you do differently in the future? I cannot tell what lesson was learned.
stillers wrote:
Tue Jan 08, 2019 10:57 pm
Well I made a mistake and the lesson is to pay more attention , the why and where of this are not pertinent to this discussion but I accept the responsibility for this. The account is a after tax account and my question is any suggestion to soften the blow?
STILLERS
OP, Longdog wasn't calling you out in any way, they were genuinely trying to figure out what happened here. I admit I'm new to the game here and am in the same boat as them.

What did doing multiple transactions do here to trigger the large gain? Does doing the transactions independently do something different here that would've resulted in a smaller value? Can you please elaborate so I don't inadvertently make the same mistake when I eventually go down this path.

Topic Author
stillers
Posts: 46
Joined: Sun Apr 23, 2017 7:48 am

Re: Tax Loss Harvesting

Post by stillers » Fri Jan 11, 2019 10:25 pm

the mistake was doing multiple transaction on wife's account after showing my son how to on my account. I allowed him with me watching show me how to do multiple transactions rather than watch transaction individually. This was done with a house full of kids and many distractions and on 12/31/2018. As previously stated I made the mistake and doing multiple transactions added to the already confusing situation. Not sure this helps as this was a mistake of doing things at last moment, not concentrating and a hurried environment. The End

Post Reply