My first TLH, you be the judge

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TheSmartFi
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My first TLH, you be the judge

Post by TheSmartFi » Sun Mar 22, 2020 2:56 pm

Here is my plan. I checked my Vanguard account and I have a $3,300 cumulative loss on my VTI shares. Every share I own is showing a loss. I plan to sell all shares of VTI and immediately turn around and purchase SCHB. From doing some research around the Bogglehead archives it looks like Vanguard will allow me to place the purchase of SCHB without waiting a day or two for the funds to settle from the VTI sale.

I chose SCHB because I don't have any purchases into that ETF in the past 30 days and no automatic investments turned on. I have also disabled the dividend reinvestment for SCHB.

Any critiques for my plan? This will be my first tax loss harvest ever. I'm open for some pointers.

Quaestner
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Re: My first TLH, you be the judge

Post by Quaestner » Sun Mar 22, 2020 3:19 pm

I'm not a pro at this, so take my comment FWIW. I think the two funds you are working with are substantially identical and the IRS might call it a wash sale. Just because one is Vanguard, and one is Schwab, don't both hold the same underlying securities? You might feel safer selling VTI and buying an S&P 500 fund because, while they are similar, you could argue they are substantially different. The 500 fund won't include, for example, small cap stocks.

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Duckie
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Re: My first TLH, you be the judge

Post by Duckie » Sun Mar 22, 2020 6:31 pm

TheSmartFi wrote:I chose SCHB because I don't have any purchases into that ETF in the past 30 days and no automatic investments turned on. I have also disabled the dividend reinvestment for SCHB.

Any critiques for my plan?
This looks reasonable to me. VTI follows the CRSP US Total Market Index with 3551 holdings as of 3/20/20. SCHB follows the Dow Jones US Broad Market Index with 2459 holdings as of 3/20/20. To me they are not "substantially identical". VOO, VV, ITOT, or SPTM would be other options.

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