TLH and keep asset allocation similar

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Phinance
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TLH and keep asset allocation similar

Post by Phinance »

Hi all, yup more TLH questions:

I currently hold VTSAX, VTIAX, and VWIUX in my taxable account. VWIUX (Tax Exempt Bonds) is down quite a bit. Was going to harvest the loss (since I’ve run out of cash for investing) and purchase more VTSAX and VTIAX (my goal is to have only those 2 in my taxable account as this has been advices on this forum previously). In order to do this correctly and maintain my AA I was going to convert stocks in my 401K into equivalent amount of bonds. The bonds are not substantially identical to those I’m selling. Just to verify:

*Selling VWIUX (Tax Exempt Intermediate Bonds) in Taxable
*Buying more VTSAX (Total US Market) and VTIAX (Toal International Market) in Taxable
*Selling VITSX (Total US Market Fund) in 401K
*Buying VBIMX (Vanguard Intermediate Bond) in 401K

Does this look ok?
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
lazynovice
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Re: TLH and keep asset allocation similar

Post by lazynovice »

Looks fine to me.
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Phinance
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Re: TLH and keep asset allocation similar

Post by Phinance »

just to clarify for TLH rules, i can’t buy a substantially identical asset 30 days prior to OR after TLH? I might have to wait because of dividend for VWIUX end of Aug. Thx again
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
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Duckie
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Re: TLH and keep asset allocation similar

Post by Duckie »

Phinance wrote: Wed Sep 21, 2022 5:07 pm just to clarify for TLH rules, i can’t buy a substantially identical asset 30 days prior to OR after TLH?
Correct.
I might have to wait because of dividend for VWIUX end of Aug.
If you send the September dividends to the settlement fund instead of reinvesting them that would sidestep the wait.
rkhusky
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Re: TLH and keep asset allocation similar

Post by rkhusky »

Phinance wrote: Wed Sep 21, 2022 5:07 pm just to clarify for TLH rules, i can’t buy a substantially identical asset 30 days prior to OR after TLH? I might have to wait because of dividend for VWIUX end of Aug. Thx again
Sell the Aug dividend with the TLH lot and you are fine. As noted, if you have any VWIUX left, send the Sept dividend to the settlement fund instead of reinvesting. Or sell the Sept dividend if you do reinvest.
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Phinance
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Re: TLH and keep asset allocation similar

Post by Phinance »

Thank u. The End of Aug dividend was set to reinvest and purchased a small lot of vwiux, any way round this or just wait? Sept dividend is going to settlement fund.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
livesoft
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Re: TLH and keep asset allocation similar

Post by livesoft »

Phinance wrote: Thu Sep 22, 2022 8:25 am Thank u. The End of Aug dividend was set to reinvest and purchased a small lot of vwiux, any way round this or just wait? Sept dividend is going to settlement fund.
Presumably, you have cost basis method set to Specific Identification. The way 'round your question is: Sell that small lot of VWIUX today and see that it does not a create wash sale.

I also want to point out that a wash sale is no big deal in this case anyways. Don't fear the wash sale. Embrace it. Own it. Use it to your advantage.
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Phinance
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Re: TLH and keep asset allocation similar

Post by Phinance »

Thanks livesoft, wanted to kindly clarify, are you saying that if I sold that small lot (the VWIUX dividend that was reinvested end of Aug) that I no longer have to worry about wash sale and exchange more VWIUX for VTSAX + VTIAX today?
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
lazynovice
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Re: TLH and keep asset allocation similar

Post by lazynovice »

Phinance wrote: Fri Sep 23, 2022 11:34 am Thanks livesoft, wanted to kindly clarify, are you saying that if I sold that small lot (the VWIUX dividend that was reinvested end of Aug) that I no longer have to worry about wash sale and exchange more VWIUX for VTSAX + VTIAX today?
The consequences of a partial wash sale is to apply a portion of your loss to the cost basis of the “replacement” shares. If you have no replacement shares, there is nothing to apply the loss to.

If you have patience, don’t sell the August reinvestment today and watch what happens. See how much if anything is disallowed. And then on Monday, sell that lot if you want to.
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Phinance
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Re: TLH and keep asset allocation similar

Post by Phinance »

Still a little confused, do I have to wait till end of Sept (based on end of Aug dividend) to sell VWIUX to not have any problems?
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
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Phinance
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TLH 30 days before rule

Post by Phinance »

[Thread merged into here --admin LadyGeek]

Hi all,

Sorry if this is a duplicate, I asked this question last week but am still a little confused. I want to start TLH VWIUX (Tax Exemp Intermediate Bond) in my taxable account. Currently set for dividends to go to settlement. Problem is my last dividend (~1K) repurchased VWIUX on 8/31/22. I don’t really understand what a wash sale is, but how do avoid this problem? One very helpful answer was to sell that small lot (1K) with my TLH then I’m clear? My assumption is I have to wait till 9/31 (which I’m ok doing)
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
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cchrissyy
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Re: TLH 30 days before rule

Post by cchrissyy »

No need to wait.
Just sell those new shares when you sell the rest.
If you do that, the only thing you need to count days for is don't make new purchases for the next 30 days.
comfortable being all stock until age 40, now working towards 60-20-20 us-intl-bond
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Re: TLH and keep asset allocation similar

Post by LadyGeek »

Phinance - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.

(Thanks to the member who reported the post and provided a link to this thread.)
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Phinance
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Re: TLH and keep asset allocation similar

Post by Phinance »

Thank you all. 2 lessons: 1 no reposts (sorry about that). 2 I can actually TLH anytime so long as I sell that end of Aug dividend, no repurchasing of the same mutual fund (VWIUX) for 30 days. I’m assuming I can indeed purchase a different mutual fund (VTSAX or VTIAX) during that 30 day window. Best :sharebeer
"Our life is frittered away by detail. Simplify, simplify." -Thoreau
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