Yet another TLH question

[lucha]

I exchanged some other funds into VTSAX on 4/26, 5/4, and 5/6... about to sell it all now (or rather swap it for VFIAX for the next 31+ days).

Is there anything i need to worry about? I haven't sold any VTSAX in more than 2 months but concerned I'm missing something and going to create a wash sale and not be able to harvest these losses.

[rkhusky]

Have you bought any VTSAX/VTI in any of your or your spouse's other accounts in the last 30 days?

Will you be buying any VTSAX/VTI in any of your or your spouse's other accounts in the next 30 days (e.g. via auto investment)?

VTSAX will be issuing a dividend on June 22, so, if you have dividend reinvestment turned on, you have until May 20 to do the TLH.

Do you have VFIAX in any of your or your spouse's other accounts (in case you want to TLH it in the future)?

[lucha]

Have you bought any VTSAX/VTI in any of your or your spouse's other accounts in the last 30 days?

Will you be buying any VTSAX/VTI in any of your or your spouse's other accounts in the next 30 days (e.g. via auto investment)?

VTSAX will be issuing a dividend on June 22, so, if you have dividend reinvestment turned on, you have until May 20 to do the TLH.

Do you have VFIAX in any of your or your spouse's other accounts (in case you want to TLH it in the future)?

Thang you for your questions. No spouse so I'll just speak for myself. I turned off reinvestments. No auto-investments set up. I am dealing with 2 taxable accounts where i bought the lots of VTSAX on different dates, planning to TLH them all at the same time.

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

[tashnewbie]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

What did you sell on 4/27? Was it at a loss?

If you sold VFIAX at a loss on 4/27, then yeah, buying it now would create a wash sale.

FSKAX is substantially similar to VTSAX but most people on this forum would not consider them "substantially identical," and therefore there'd be no wash sale. They follow different indices, have different holdings, etc. Who knows what the IRS thinks; it hasn't clarified criteria for "substantially identical."

Are you at Fidelity? If so, do you incur costs to buy Vanguard mutual funds?

[rkhusky]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

VLCAX is about the same as VFIAX.

[anon_investor]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

VLCAX is about the same as VFIAX.

I would use VLCAX.

[lucha]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

What did you sell on 4/27? Was it at a loss?

If you sold VFIAX at a loss on 4/27, then yeah, buying it now would create a wash sale.

FSKAX is substantially similar to VTSAX but most people on this forum would not consider them "substantially identical," and therefore there'd be no wash sale. They follow different indices, have different holdings, etc. Who knows what the IRS thinks; it hasn't clarified criteria for "substantially identical."

Are you at Fidelity? If so, do you incur costs to buy Vanguard mutual funds?

I sold VFIAX at a loss on 4/27. I love that Vanguard blocked me from re-purchasing, as I had forgotten that the sale was that recent.
I am at Vanguard but OK to pay small fees on fidelity funds if that's the way the cookie crumbles.

[lucha]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

VLCAX is about the same as VFIAX.

I would use VLCAX.

Great tip! Thanks so much!!!

[lucha]

I think the issue is that I bought VTSAX in TWO SEPARATE ACCOUNTS on three separate days. Now I'm concerned about how to sell it so it doesn't create a wash sale... I can't sell all the new lots at once. Does that make sense? Does this still work?

[anon_investor]

I think the issue is that I bought VTSAX in TWO SEPARATE ACCOUNTS on three separate days. Now I'm concerned about how to sell it so it doesn't create a wash sale... I can't sell all the new lots at once. Does that make sense? Does this still work?

Why can't you sell in both accounts?

[rkhusky]

I think the issue is that I bought VTSAX in TWO SEPARATE ACCOUNTS on three separate days. Now I'm concerned about how to sell it so it doesn't create a wash sale... I can't sell all the new lots at once. Does that make sense? Does this still work?

It will create a wash sale, but as soon as you sell the other shares, you will recoup your loss, as long as they are both taxable accounts. You will have to keep track of the wash sale, since brokerages will only do that if it occurs in the same account.

[lucha]

I think the issue is that I bought VTSAX in TWO SEPARATE ACCOUNTS on three separate days. Now I'm concerned about how to sell it so it doesn't create a wash sale... I can't sell all the new lots at once. Does that make sense? Does this still work?

It will create a wash sale, but as soon as you sell the other shares, you will recoup your loss, as long as they are both taxable accounts. You will have to keep track of the wash sale, since brokerages will only do that if it occurs in the same account.

Sorry i'm not following when you say "you will recoup your losses"... does this mean i can harvest all the losses despite the circumstances?

[tashnewbie]

I just tried to buy some VFIAX with cash in my settlement fund and it is restricting me until 5/26, I forgot that I had only sold some on 4/27! Argh. What other trading partners can I tap right now? For wash sale purposes, isn't FSKAX (fidelity total market fund) considered the same as VTSAX?

What did you sell on 4/27? Was it at a loss?

If you sold VFIAX at a loss on 4/27, then yeah, buying it now would create a wash sale.

FSKAX is substantially similar to VTSAX but most people on this forum would not consider them "substantially identical," and therefore there'd be no wash sale. They follow different indices, have different holdings, etc. Who knows what the IRS thinks; it hasn't clarified criteria for "substantially identical."

Are you at Fidelity? If so, do you incur costs to buy Vanguard mutual funds?

I sold VFIAX at a loss on 4/27. I love that Vanguard blocked me from re-purchasing, as I had forgotten that the sale was that recent.
I am at Vanguard but OK to pay small fees on fidelity funds if that's the way the cookie crumbles.

If you're at Vanguard, I agree with others that VLCAX would be a better TLH partner than FSKAX that you'd incur a fee to purchase.

[rkhusky]

I think the issue is that I bought VTSAX in TWO SEPARATE ACCOUNTS on three separate days. Now I'm concerned about how to sell it so it doesn't create a wash sale... I can't sell all the new lots at once. Does that make sense? Does this still work?

It will create a wash sale, but as soon as you sell the other shares, you will recoup your loss, as long as they are both taxable accounts. You will have to keep track of the wash sale, since brokerages will only do that if it occurs in the same account.

Sorry i'm not following when you say "you will recoup your losses"... does this mean i can harvest all the losses despite the circumstances?

Yes.

Example in taxable accounts:
Day 1: Buy 10 sh at $10/sh
Day 2: Buy 15 sh at $12/sh
Day 3: Sell the 10 sh from Day 1 at $8/sh (loss of $2/sh or $20 total)
Day 4: Sell the 15 sh from Day 2 at $8/sh (loss of $4/sh or $60 total)
Total loss = $80

However, the Day 3 sale is a wash sale because of the purchase on Day 2, so the loss of $2/sh is disallowed.
Wash sales are matched share by share.
The loss of $2/sh is added to the basis of 10 of the Day 2 shares -> Day 2 shares = 10 sh at $14/sh and 5 sh at $12/sh
When the Day 2 shares are sold on Day 4 at $8/sh -> loss of $6/sh for 10 sh and loss of $4/sh for 5 shares
Total loss = $60 + $20 = $80 (same as above without wash sale)


Same example as above, but sales in reverse order:
Day 1: Buy 10 sh at $10/sh
Day 2: Buy 15 sh at $12/sh
Day 3: Sell the 15 sh from Day 2 at $8/sh (loss of $4/sh or $60 total)
Day 4: Sell the 10 sh from Day 1 at $8/sh (loss of $2/sh or $20 total)
Total loss = $80

However, the Day 3 sale is a partial wash sale because of the purchase on Day 1.
The loss of $4/sh for 5 shares is allowed ($20 total), but the loss of $4/sh for 10 shares is disallowed (wash sales are matched share by share)
The loss of $4/sh is added to the basis of the Day 1 shares -> Day 1 shares = 10 sh at $14/sh
When the Day 1 shares are sold on Day 4 at $8/sh -> loss of $6/sh for 10 sh ($60 total)
Total loss = $20 (Day 3) + $60 (Day 4) = $80 (same as above without wash sale)