Buy high in taxable sell high in IRA ?

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Topic Author
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Buy high in taxable sell high in IRA ?

Post by carminered2019 »

1. I am thinking of selling 5x of Total Bond(FXNAX) to buy 5x Total US(FSKAX) in taxable then.
2. Selling 5x of Total US(FSKAX) in IRA to buy Total Bond(FXNAX).

I like to do this to slow the growth of my IRA and get my cost basis lower in taxable for FSKAX. Is this a wise move ?

EF: yes in CD
AGE: 52
Last edited by carminered2019 on Wed Dec 08, 2021 3:26 pm, edited 1 time in total.
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retired@50
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Location: Living in the U.S.A.

Re: Buy high in taxable sell high in IRA ?

Post by retired@50 »

carminered2019 wrote: Tue Dec 07, 2021 1:23 pm 1. I am thinking of selling 5x of Total Bond(FSKAX) to buy 5x Total US(FSKAX) in taxable then.
2. Selling 5x of Total US(FSKAX) in IRA to buy Total Bond(FSKAX).

I like to do this to slow the growth of my IRA and get my cost basis lower higher in taxable for FSKAX. Is this a wise move ?

EF: yes in CD
AGE: 52
Yes, it's wise, at least in my book.

See wiki article on tax-efficient fund placement, which generally recommends holding bonds in tax deferred accounts (like an IRA).
https://www.bogleheads.org/wiki/Tax-eff ... _placement

I suspect it will raise the cost basis of FSKAX, not lower it. Also, you've used the same ticker for both "Total Bond" and "Total US".
Maybe you meant FXNAX for "Total Bond"?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
exodusNH
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Joined: Wed Jan 06, 2021 7:21 pm

Re: Buy high in taxable sell high in IRA ?

Post by exodusNH »

carminered2019 wrote: Tue Dec 07, 2021 1:23 pm 1. I am thinking of selling 5x of Total Bond(FSKAX) to buy 5x Total US(FSKAX) in taxable then.
2. Selling 5x of Total US(FSKAX) in IRA to buy Total Bond(FSKAX).

I like to do this to slow the growth of my IRA and get my cost basis lower in taxable for FSKAX. Is this a wise move ?

EF: yes in CD
AGE: 52
The general recommendation is to keep bonds in tax-deferred accounts (e.g. traditional IRA or 401k) because of the coupon payments are taxed as ordinary income. It also has the benefit of slowing growth in that account, which reduces your RMDs, as you imply above.

I think your plan makes sense.
Topic Author
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: Buy high in taxable sell high in IRA ?

Post by carminered2019 »

Will this move trigger a wash sale ?
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retired@50
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Re: Buy high in taxable sell high in IRA ?

Post by retired@50 »

carminered2019 wrote: Tue Dec 07, 2021 8:40 pm Will this move trigger a wash sale ?
It could if you sell the bond fund at a loss in the taxable account and buy back the exact same bond fund in the IRA.

If you're selling at a gain in the taxable account, then no.

See tax loss harvesting wiki page for more details: https://www.bogleheads.org/wiki/Tax_loss_harvesting

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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obafgkm
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Re: Buy high in taxable sell high in IRA ?

Post by obafgkm »

carminered2019 wrote: Tue Dec 07, 2021 1:23 pm 1. I am thinking of selling 5x of Total Bond(FSKAX) to buy 5x Total US(FSKAX) in taxable then.
2. Selling 5x of Total US(FSKAX) in IRA to buy Total Bond(FSKAX).
:confused I'm confused. The ticker symbol for Total Bond is not FSKAX. Or am I missing something?
"I'm investing in stocks... chicken, beef, and vegetable. It's risky, but I know one day it'll pay off & I'll be a bouillonaire. Who knows, I might even open up a Broth IRA."
Topic Author
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: Buy high in taxable sell high in IRA ?

Post by carminered2019 »

obafgkm wrote: Wed Dec 08, 2021 3:11 pm
carminered2019 wrote: Tue Dec 07, 2021 1:23 pm 1. I am thinking of selling 5x of Total Bond(FSKAX) to buy 5x Total US(FSKAX) in taxable then.
2. Selling 5x of Total US(FSKAX) in IRA to buy Total Bond(FSKAX).
:confused I'm confused. The ticker symbol for Total Bond is not FSKAX. Or am I missing something?
Good catch :oops: !! I edited it
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