Wash Sales - Managed Account and Personal Brokerage Account

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brandoko
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Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 1:14 am

Hi,

I recently started investing in the last 6 months with my 401k and 529 through Fidelity. I've used target date index funds in both. I wanted to start investing in taxable brokerage accounts, and so I started a Fidelity Go account because I wasn't sure how comfortable I felt picking my own portfolio. More recently, I've gained confidence from learning more about investments and have wanted to start investing in ETFs and Index funds with some personal money outside of the Fidelity Go account.

I've read a lot about wash sales and my concern is that if I have two separate brokerage accounts, one managed by Fidelity Go and the other personally managed by me, I'll trigger washes and have to manually account for them later when filing taxes and reconcile the two accounts. I contacted Fidelity about this and they assured me this wasn't the case because the Fidelity Go account is managed by them and I don't have any say over the funds they invest in. So whatever I do in my personal brokerage account would not need to be reconciled.

Is this true? Or do I need to be concerned? I assumed Fidelity is correct, but I've read conflicting statements on the internet concerning this.

Any advice is appreciated.

Nate79
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by Nate79 » Fri Mar 15, 2019 6:21 am

No, that is completely wrong what Fidelity told you. You are absolutely responsible for all taxable accounts and any taxable accounts and IRAs will cause wash sales.

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jhfenton
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by jhfenton » Fri Mar 15, 2019 7:20 am

As Nate79 said, Fidelity is wrong. Fidelity won't report any wash sales based on transactions occurring in separate accounts, not even between two accounts at Fidelity. But you are still responsible for figuring it out and reporting it. That is a very good reason to use different funds in your personally-managed account.

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 7:20 am

At tax time, does Fidelity provide you a list of the trades that they made in your Go account? If they did, that might be an indication that you would have to be concerned with wash sales.

For example, if I own a mutual fund, the brokerage does not provide me a list of the trades they make. I am free to buy/sell any of the individual stocks within the mutual fund, without fear of a wash sale due to purchases in the mutual fund.

Many claim that 401k's are not subject to wash sale rules because the investor does not have sufficient control over the investment choices or the timing of purchases/sales. It seems like you have more control within a 401k than you do in this Fidelity Go account.

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 7:39 am

Here is an article that indicates that trades made in robo-advisor accounts can be susceptible to wash sales:
https://www.sec.gov/news/press-release/2018-300
Wealthfront disclosed to clients employing its tax-loss harvesting strategy that it would monitor all client accounts for any transactions that might trigger a wash sale – which can diminish the benefits of the harvesting strategy – but failed to do so. Over a period of more than three years during which it made this disclosure, wash sales occurred in at least 31 percent of accounts enrolled in Wealthfront’s tax loss harvesting strategy.

retiredjg
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by retiredjg » Fri Mar 15, 2019 7:45 am

Fidelity Go apparently uses something the call FidelityFlex funds, both active and passive. These funds are only available in limited situations such as the Fidelity Go program. It is possible there is nothing that is "substantially identical" to these funds, outside of Fidelity Go, so there is no possibility of a wash sale.

Other Robos that I've looked at openly discuss tax loss harvesting and wash sales. I did not find any mention of either on the Fidelity Go site but my search was not exhaustive. If they tax loss harvest they certainly do not make it obvious.

They do mention rebalancing but that does not usually mean selling something at a loss. It is usually just the opposite.

I think it is possible you don't need to worry about wash sales, but not for the reason you understood the Fidelity rep stated. Nevertheless, I'm not sure I'd want two separate taxable accounts unless there is a specific reason to do that.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 9:05 am

retiredjg wrote:
Fri Mar 15, 2019 7:45 am
Fidelity Go apparently uses something the call FidelityFlex funds, both active and passive. These funds are only available in limited situations such as the Fidelity Go program. It is possible there is nothing that is "substantially identical" to these funds, outside of Fidelity Go, so there is no possibility of a wash sale.

Other Robos that I've looked at openly discuss tax loss harvesting and wash sales. I did not find any mention of either on the Fidelity Go site but my search was not exhaustive. If they tax loss harvest they certainly do not make it obvious.

They do mention rebalancing but that does not usually mean selling something at a loss. It is usually just the opposite.

I think it is possible you don't need to worry about wash sales, but not for the reason you understood the Fidelity rep stated. Nevertheless, I'm not sure I'd want two separate taxable accounts unless there is a specific reason to do that.
Yes, you are correct that they don't have tax loss harvesting as a stated service. But they do rebalance. My assumption was that even if they're not doing active tax loss harvesting, I could still be getting losses based on their rebalances that I could potentially have to reconcile with trades on funds in my personal brokerage account. I won't be filing taxes for any taxable account until next year so I'm not fully aware of how it works. I read about it on TurboTax, and it sounds like for each taxable account I'll receive a 1099 that I then will list on form 8949 all the transactions of in that form 1099. So my understanding is the cost basis for each transaction could be different since I would have two different 1099s and that's when I'd have to do the manual adjustment. Is that correct?

And yes, they do use Fidelity flex funds, but I'm not sure of the implications of that in relation to similarity with other funds. Maybe that's why Fidelity didn't think I needed to be concerned.

retiredjg
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by retiredjg » Fri Mar 15, 2019 9:12 am

brandoko wrote:
Fri Mar 15, 2019 9:05 am
Is that correct?
Sorry, I can't help with that.
And yes, they do use Fidelity flex funds, but I'm not sure of the implications of that in relation to similarity with other funds. Maybe that's why Fidelity didn't think I needed to be concerned.
That's a wild guess on my part. For a wash sale to occur, you have to sell and buy something that is "substantially identical".

Since you own some of these funds, maybe you could copy and paste the description of one of them for us to look at? If yes, do one of the index funds.
Last edited by retiredjg on Fri Mar 15, 2019 9:14 am, edited 1 time in total.

dbr
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by dbr » Fri Mar 15, 2019 9:14 am

You have to list what investments exactly you hold. In the first place unless transactions have happened in exactly identical funds no broker is going to attempt to judge that there is a wash sale of substantially but not exactly identical holdings. There is no IRS guidance regarding how anyone would proceed to determine that.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 10:13 am

So I spoke to Fidelity over the phone again, and they claim that Fidelity Go will look at any other brokerage accounts you have with them and take them into account so as to not incur a wash sale when rebalancing or taking new positions. In addition, they claimed that when I receive my tax forms from them, they should all be accurate for wash sales between all accounts and not just on a per account basis, and that they'll do the correct cost basis. Since I only have Fidelity accounts, it would seem then like I have nothing to worry about for filing taxes.

Thoughts?

retiredjg
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by retiredjg » Fri Mar 15, 2019 10:37 am

brandoko wrote:
Fri Mar 15, 2019 10:13 am
Thoughts?
From a link above, apparently Wealthfront promised the same thing and failed to accomplish it.

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Wiggums
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by Wiggums » Fri Mar 15, 2019 10:50 am

brandoko wrote:
Fri Mar 15, 2019 10:13 am
So I spoke to Fidelity over the phone again, and they claim that Fidelity Go will look at any other brokerage accounts you have with them and take them into account so as to not incur a wash sale when rebalancing or taking new positions. In addition, they claimed that when I receive my tax forms from them, they should all be accurate for wash sales between all accounts and not just on a per account basis, and that they'll do the correct cost basis. Since I only have Fidelity accounts, it would seem then like I have nothing to worry about for filing taxes.

Thoughts?
I can’t say if this is true or false. I have five accounts with my social security number on them at Fidelity. From a practical standpoint, I cannot see them doing this for each trade.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 10:55 am

Wiggums wrote:
Fri Mar 15, 2019 10:50 am
brandoko wrote:
Fri Mar 15, 2019 10:13 am
So I spoke to Fidelity over the phone again, and they claim that Fidelity Go will look at any other brokerage accounts you have with them and take them into account so as to not incur a wash sale when rebalancing or taking new positions. In addition, they claimed that when I receive my tax forms from them, they should all be accurate for wash sales between all accounts and not just on a per account basis, and that they'll do the correct cost basis. Since I only have Fidelity accounts, it would seem then like I have nothing to worry about for filing taxes.

Thoughts?
I can’t say if this is true or false. I have five accounts with my social security number on them at Fidelity. From a practical standpoint, I cannot see them doing this for each trade.
My primary concern isn't them incurring a wash sale. Tax loss harvesting isn't s big priority for me with these accounts. My main concern would be whether I have to rectify the cost basis of transactions come tax season when they do incur a wash sale. E.g. will Fidelity recognize the wash sale and give the correct cost basis? I just want to avoid having to go to someone other than TurboTax since my tax filing is so cheap with them.

Have you noticed with your Fidelity accounts?

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 11:57 am

brandoko wrote:
Fri Mar 15, 2019 10:13 am
Since I only have Fidelity accounts, it would seem then like I have nothing to worry about for filing taxes.
brandoko wrote:
Fri Mar 15, 2019 10:55 am
E.g. will Fidelity recognize the wash sale and give the correct cost basis?
Do you have all your accounts at Fidelity (taxable, IRA, 401k, HSA, etc)?

Does Fidelity's definition of a wash sale match yours? Would they count FDFIX (Flex 500) and FXAIX (500 Index) as substantially identical and would you? Ordinarily, they would not flag those two as causing a wash sale, since they don't have the same CUSIP, but perhaps they do in a Go account.

Does Fidelity consider taxes when rebalancing, e.g. selling shares with highest cost basis or suggesting that rebalancing be done in a tax-advantaged account, rather than a taxable account?

I would double check their calculations for at least the first year or two.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 1:08 pm

rkhusky wrote:
Fri Mar 15, 2019 11:57 am
brandoko wrote:
Fri Mar 15, 2019 10:13 am
Since I only have Fidelity accounts, it would seem then like I have nothing to worry about for filing taxes.
brandoko wrote:
Fri Mar 15, 2019 10:55 am
E.g. will Fidelity recognize the wash sale and give the correct cost basis?
Do you have all your accounts at Fidelity (taxable, IRA, 401k, HSA, etc)?

Does Fidelity's definition of a wash sale match yours? Would they count FDFIX (Flex 500) and FXAIX (500 Index) as substantially identical and would you? Ordinarily, they would not flag those two as causing a wash sale, since they don't have the same CUSIP, but perhaps they do in a Go account.

Does Fidelity consider taxes when rebalancing, e.g. selling shares with highest cost basis or suggesting that rebalancing be done in a tax-advantaged account, rather than a taxable account?

I would double check their calculations for at least the first year or two.
I have 401k, ESPP, 529, and taxable at Fidelity. My HSA is through Premera and managed separately.

--Fidelity--
401K - BlackRock 2060 Target Date Fund LIZKX
ESPP - Receive shares quarterly, which I sell on receiving
529 - Fidelity Aggressive Growth Index Fund FFAGX
Fidelity Go Brokerage Account - Aggressive Growth Portfolio in various Fidelity Flex Funds
Personal Brokerage Account - yet to invest anything due to wanting to check on this wash sale consideration, though I'm supposed to receive RSU's from my company in this account.

--Outside Fidelity--
HSA - Schwab 2060 Target Date Fund SWPRX

I asked Fidelity and they said that they wouldn't consider FDFIX and FXAIX a wash. But I asked them if the Go account sold FXAIX and then I bought FXAIX in my personal account, and they said that wouldn't be a wash either because they're separate accounts. So, I have a general sense of unease about the whole thing because those should definitely be a wash according to the IRS.

I think I'll likely close out the Go account or just put all taxable investments in the Go account to avoid any strange wash sale situations that don't get accounted for with the correct cost basis.

Do I have to worry about this with my other accounts too? (401k, HSA, 529)

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 1:27 pm

brandoko wrote:
Fri Mar 15, 2019 1:08 pm
I asked Fidelity and they said that they wouldn't consider FDFIX and FXAIX a wash. But I asked them if the Go account sold FXAIX and then I bought FXAIX in my personal account, and they said that wouldn't be a wash either because they're separate accounts. So, I have a general sense of unease about the whole thing because those should definitely be a wash according to the IRS.
What they probably mean is that the government only requires them to report wash sales between identical investments in the same account, so they do the minimum that is required, like other brokerages.

Wash sales definitely occur between different accounts, including your own, your spouse's, and any corporations you control.
brandoko wrote:
Fri Mar 15, 2019 1:08 pm
Do I have to worry about this with my other accounts too? (401k, HSA, 529)
There is debate on that. The primary tax law does not differentiate different accounts. But then the IRS issued a ruling in 2008 that specifically said that IRA's are included in wash sales. Some have taken that to mean that all non-IRA tax-deferred accounts are therefore not included, even though the IRS ruling said not to read anything further into the ruling.

I note that two other robo-advisors, Betterment and Wealthfront, consider all accounts applicable to wash sales:
https://help.betterment.com/hc/en-us/ar ... -accounts-
https://support.wealthfront.com/hc/en-u ... ule-apply-

But, if you don't buy BlackRock 2060 Target Date Fund, Fidelity Aggressive Growth Index Fund, or Schwab 2060 Target Date Fund in any of your taxable accounts, you will be fine. And you wouldn't want those in taxable accounts anyway.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 1:53 pm

rkhusky wrote:
Fri Mar 15, 2019 1:27 pm
brandoko wrote:
Fri Mar 15, 2019 1:08 pm
I asked Fidelity and they said that they wouldn't consider FDFIX and FXAIX a wash. But I asked them if the Go account sold FXAIX and then I bought FXAIX in my personal account, and they said that wouldn't be a wash either because they're separate accounts. So, I have a general sense of unease about the whole thing because those should definitely be a wash according to the IRS.
What they probably mean is that the government only requires them to report wash sales between identical investments in the same account, so they do the minimum that is required, like other brokerages.

Wash sales definitely occur between different accounts, including your own, your spouse's, and any corporations you control.
brandoko wrote:
Fri Mar 15, 2019 1:08 pm
Do I have to worry about this with my other accounts too? (401k, HSA, 529)
There is debate on that. The primary tax law does not differentiate different accounts. But then the IRS issued a ruling in 2008 that specifically said that IRA's are included in wash sales. Some have taken that to mean that all non-IRA tax-deferred accounts are therefore not included, even though the IRS ruling said not to read anything further into the ruling.

I note that two other robo-advisors, Betterment and Wealthfront, consider all accounts applicable to wash sales:
https://help.betterment.com/hc/en-us/ar ... -accounts-
https://support.wealthfront.com/hc/en-u ... ule-apply-

But, if you don't buy BlackRock 2060 Target Date Fund, Fidelity Aggressive Growth Index Fund, or Schwab 2060 Target Date Fund in any of your taxable accounts, you will be fine. And you wouldn't want those in taxable accounts anyway.
Thanks for explaining that. Then I won't worry about those accounts and just leave them alone.

I got off the phone with Fidelity again because I've been getting such a variety of answers from so many people. I asked for a list of funds that Go invests in and he said that there isn't some definitive list because those funds are all proprietary and are not publicly available to anyone else. Because of this, the advisor said that there is no possibility to generate a wash between its funds and my personal brokerage account. If I buy FXAIX in my personal brokerage account, it has no bearing on the Go account, according to him.

I guess for now, my conclusion will be to watch what happens with the Go account and see what it invests in and not do side investments in any funds/etfs in my personal brokerage account. And then I can close it out if I want to personally manage things. And not worry about the other accounts since they're just in target date funds essentially.

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 2:48 pm

brandoko wrote:
Fri Mar 15, 2019 1:53 pm
I got off the phone with Fidelity again because I've been getting such a variety of answers from so many people. I asked for a list of funds that Go invests in and he said that there isn't some definitive list because those funds are all proprietary and are not publicly available to anyone else. Because of this, the advisor said that there is no possibility to generate a wash between its funds and my personal brokerage account. If I buy FXAIX in my personal brokerage account, it has no bearing on the Go account, according to him.
I think most people would consider two funds from Fidelity that both follow the S&P 500 index (FDFIX and FXAIX) to be "substantially identical." However, there are some that don't. And, since the IRS has not ever defined "substantially identical," no one knows for sure. For now, it is up to each investor's comfort level. And perhaps FDFIX doesn't actually track the S&P 500.

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BL
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by BL » Fri Mar 15, 2019 3:22 pm

Why not just buy the recommended total stock market and/or total international, and bonds, munis, or MM if you need to add fixed income in your account as it sounds like they are not in the Go portfolio? Don't make it complicated.

dbr
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by dbr » Fri Mar 15, 2019 3:28 pm

Whether or not Fidelity makes sure all the accounts they can find for you are accounted correctly for wash sales is one thing. What funds are substantially identical is a different question. For the rep to say the accounting question doesn't matter because you would never be involved with substantially identical funds might be a practical answer but doesn't actually address the question.

I am pretty certain that unless the two funds are the same fund or share classes of the same fund that no broker is going to report a wash sale. The idea that one can debate what is "considered" a wash sale makes no sense. The law is either ruling a wash sale or it isn't. The IRS has not ruled any not identical fund exchanges as wash sales, as far as we can figure out so far.

I don't know for sure if Fidelity is efficient at accounting for all the actual wash sales.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 4:27 pm

rkhusky wrote:
Fri Mar 15, 2019 2:48 pm
I think most people would consider two funds from Fidelity that both follow the S&P 500 index (FDFIX and FXAIX) to be "substantially identical." However, there are some that don't. And, since the IRS has not ever defined "substantially identical," no one knows for sure. For now, it is up to each investor's comfort level. And perhaps FDFIX doesn't actually track the S&P 500.
Yes, I agree. If you look at the prospectus of both funds, they're both Geode Capital Management with the exact same portfolio managers, and the exact same principal investment strategy (literally copy/paste between prospectus)

"Normally investing at least 80% of assets in common stocks included in the S&P 500® Index, which broadly represents the performance of common stocks publicly traded in the United States."

Both of their YTD performance is within 2 basis points of each other. 1 Yr is identical.

I don't know how anyone can look at these two funds and not conclude they're essentially in strategy. The difference that matters is they're not the same security and the flex fund cannot be invested in by a personal brokerage account. So maybe that is a dividing line?
dbr wrote:
Fri Mar 15, 2019 3:28 pm
I am pretty certain that unless the two funds are the same fund or share classes of the same fund that no broker is going to report a wash sale. The idea that one can debate what is "considered" a wash sale makes no sense. The law is either ruling a wash sale or it isn't. The IRS has not ruled any not identical fund exchanges as wash sales, as far as we can figure out so far.
I think this is the point Fidelity is trying to make. Since it's an entirely different security and it's an automated system, though that security has the same management team and same goal, it can't be considered a wash, or at least there isn't a precedent for that. And I think that's why they created these flex funds and only allowed them to be invested in in managed accounts like Go, so that customers wouldn't have to worry about the differences between personal and managed accounts. In fact, one of the ideas that Fidelity Go conveys is that it's a good way to introduce consumers to investing and they can do side by side investing in their personal brokerage and compare how they're doing to what's going on in their Go account. If wash sales were going to be a big worry having the two taxable accounts, I doubt Fidelity would advertise that?
BL wrote:
Fri Mar 15, 2019 3:22 pm
Why not just buy the recommended total stock market and/or total international, and bonds, munis, or MM if you need to add fixed income in your account as it sounds like they are not in the Go portfolio? Don't make it complicated.
Yes, that's a fair point. To just avoid any fidelity flex funds (which is easy since I can't buy them) and avoid funds that are similar. As you suggested, Total Market Index Fund, which doesn't seem to be represented

This is the list of the ones I could find for anyone who is interested:

• Fidelity Flex Large Cap Growth fund: FLCLX
• Fidelity Flex Intrinsic Opportunities fund: FFNPX
• Fidelity Flex Core Bond fund: FLXCX
• Fidelity Flex Mid Cap Value fund: FFMVX
• Fidelity Flex Opportunistic Insights fund: FFPIX
• Fidelity Flex Small Cap Index fund: FLXSX
• Fidelity Flex Inflation-Protected Bond Index fund: FBUIX
• Fidelity Flex International Index fund: FITFX
• Fidelity Flex Real Estate fund: FFERX
• Fidelity Flex Small Cap fund: FCUTX
• Fidelity Flex Short-Term Bond fund: FBSTX
• Fidelity Flex International fund: FULTX
• Fidelity Flex Government Money Market fund: FLGXX
• Fidelity Flex 500 Index Fund: FDFIX

rkhusky
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by rkhusky » Fri Mar 15, 2019 4:48 pm

brandoko wrote:
Fri Mar 15, 2019 4:27 pm
I don't know how anyone can look at these two funds and not conclude they're essentially in strategy. The difference that matters is they're not the same security and the flex fund cannot be invested in by a personal brokerage account. So maybe that is a dividing line?
Many people say that two funds that track different indexes are not substantially identical. Could be the case here with Fidelity's proprietary Flex funds. Others say that two funds from different companies, even if they follow the same index, are not substantially identical. Others say that two funds whose goal is the same (e.g. total us market, top 500 stocks, etc) are substantially identical, even if they don't follow the same index. Since the IRS has not provided guidance, it is up to you to decide with what you are comfortable.

Whatever you choose, Fidelity (and Vanguard and most likely others) is not going to flag a wash sale, unless it is in the identical fund in the same account. You will have do anything further on your own. My guess is that brokerages that focus on TLH (robo-advisors) will try to flag wash sales of identical funds for the accounts to which you provide them access.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Fri Mar 15, 2019 5:26 pm

rkhusky wrote:
Fri Mar 15, 2019 4:48 pm
brandoko wrote:
Fri Mar 15, 2019 4:27 pm
I don't know how anyone can look at these two funds and not conclude they're essentially in strategy. The difference that matters is they're not the same security and the flex fund cannot be invested in by a personal brokerage account. So maybe that is a dividing line?
Many people say that two funds that track different indexes are not substantially identical. Could be the case here with Fidelity's proprietary Flex funds. Others say that two funds from different companies, even if they follow the same index, are not substantially identical. Others say that two funds whose goal is the same (e.g. total us market, top 500 stocks, etc) are substantially identical, even if they don't follow the same index. Since the IRS has not provided guidance, it is up to you to decide with what you are comfortable.

Whatever you choose, Fidelity (and Vanguard and most likely others) is not going to flag a wash sale, unless it is in the identical fund in the same account. You will have do anything further on your own. My guess is that brokerages that focus on TLH (robo-advisors) will try to flag wash sales of identical funds for the accounts to which you provide them access.
Makes sense. Thank you and to everyone else for your help. I feel that I have a much better understanding now of how this all works now. Fidelity is probably tired of hearing from me about wash sales, lol. But yeah, the last advisor I talked to on the phone agreed with me that FXAIX and FDFIX are essentially the same since they're both 500 index funds, managed by Geode, and both run by Fidelity, and even though he can't tell me for sure it's a wash, that would be something to consider and that the IRS could potentially audit me on.

So I think if I want to invest on my own outside of the Go account while simultaneously having the Go account, I'd want to avoid any similar fund holdings in the Go account. Currently, it doesn't look like there is any Flex Total Market Index Fund, so that would likely be a safe trade, or trying to do some more risky investing with sector equity funds.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Sat Mar 16, 2019 12:28 pm

Quick follow up question to my last posting. I was looking at the underlying investments in my 529 New Hampshire Aggressive Growth Index Fund, and they just do a basket mix of Fidelity Index Funds. 70% Total Market Index Fund, 30% Global ex U.S. Index Fund. Since it's a basket of index funds and the underlying index funds could technically be bought/sold by me in a taxable brokerage account. Could I create a wash between accounts if I did that? My thought was no because even if I sold the total market index fund in my taxable and bought NH aggressive growth in my 529 in the same month, it's not substantially identical to the NH Aggr. Growth since only 70% of it is that.

Vs.

If I bought the Total Market Index fund out right in the 529 then it could create a wash with my taxable account.

https://fundresearch.fidelity.com/mutua ... ppcode=529

The majority of the 529 options are just basket proportions of different Fidelity Index or actively managed funds. So it would seem strange to have to worry about it with these

https://fundresearch.fidelity.com/colle ... y?state=NH
Last edited by brandoko on Sat Mar 16, 2019 12:39 pm, edited 1 time in total.

retiredjg
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by retiredjg » Sat Mar 16, 2019 12:37 pm

A fund of funds is not substantially identical to one of the funds that is in it in my opinion.

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brandoko
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Re: Wash Sales - Managed Account and Personal Brokerage Account

Post by brandoko » Sat Mar 16, 2019 12:43 pm

retiredjg wrote:
Sat Mar 16, 2019 12:37 pm
A fund of funds is not substantially identical to one of the funds that is in it in my opinion.
I agree. Thanks for your response. Just wanted to double check my logic.

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