VUSXX taxable for state and local now

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mktwizard
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VUSXX taxable for state and local now

Post by mktwizard »

I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

mktwizard wrote: Fri Mar 10, 2023 6:54 pm I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
FYI FDLXX was only 93%+ exempt from state/local taxes in 2022.

If you have money at Merrill Edge you can look at TTTXX.
UpperNwGuy
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Re: VUSXX taxable for state and local now

Post by UpperNwGuy »

Seems like the tax tail is wagging the dog.....
OldSport
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Re: VUSXX taxable for state and local now

Post by OldSport »

anon_investor wrote: Fri Mar 10, 2023 6:58 pm
mktwizard wrote: Fri Mar 10, 2023 6:54 pm I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
FYI FDLXX was only 93%+ exempt from state/local taxes in 2022.

If you have money at Merrill Edge you can look at TTTXX.
TTTXX actually seems decent.
xpy1999
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Re: VUSXX taxable for state and local now

Post by xpy1999 »

Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
At Merrill Edge I keep my cash in TTTXX. At Fidelity I keep my funds meant to pay for current expenses in FDLXX, longer term savings at Fidelity are keep in autorolled T-Bills.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
KlangFool
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Re: VUSXX taxable for state and local now

Post by KlangFool »

mktwizard wrote: Fri Mar 10, 2023 6:54 pm I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
mktwizard,

May I know where you find this information? And, how much is it? 5%?

KlangFool
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GetSmarter
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Re: VUSXX taxable for state and local now

Post by GetSmarter »

For 2022 tax purposes, according to Vanguard, VUSXX is considered 100% state tax free. https://www.vanguard.com/pdf/USGOIN_2023.pdf
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xpy1999
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Re: VUSXX taxable for state and local now

Post by xpy1999 »

anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Good to know. If I want to buy ETFs, I still have to sell FDLXX to settlement fund and wait for the next day, right?
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

xpy1999 wrote: Fri Mar 10, 2023 7:22 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Good to know. If I want to buy ETFs, I still have to sell FDLXX to settlement fund and wait for the next day, right?
Nope, that is the best part. Fidelity will auto liquidate retail money market funds. Assuming all funds are settled, FDLXX is treated as cash available to trade or withdraw.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

GetSmarter wrote: Fri Mar 10, 2023 7:15 pm For 2022 tax purposes, according to Vanguard, VUSXX is considered 100% state tax free. https://www.vanguard.com/pdf/USGOIN_2023.pdf
At the end January 2023 and February 2023, 20%-25% of VUSXX's holdings were in repos:
https://investor.vanguard.com/investmen ... omposition
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

KlangFool wrote: Fri Mar 10, 2023 7:14 pm
mktwizard wrote: Fri Mar 10, 2023 6:54 pm I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
mktwizard,

May I know where you find this information? And, how much is it? 5%?

KlangFool
Over 24% at the end of Feb 2023:
https://investor.vanguard.com/investmen ... omposition
exodusing
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Re: VUSXX taxable for state and local now

Post by exodusing »

KlangFool wrote: Fri Mar 10, 2023 7:14 pm May I know where you find this information? And, how much is it? 5%?

KlangFool
https://investor.vanguard.com/investmen ... omposition

At the end of February it was 24% repo, up a bit from January.
GetSmarter wrote: Fri Mar 10, 2023 7:15 pm For 2022 tax purposes, according to Vanguard, VUSXX is considered 100% state tax free. https://www.vanguard.com/pdf/USGOIN_2023.pdf
That was then. Alas, things have changed.
peteyboy
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Re: VUSXX taxable for state and local now

Post by peteyboy »

KlangFool wrote: Fri Mar 10, 2023 7:14 pm
mktwizard wrote: Fri Mar 10, 2023 6:54 pm I shifted most of my cash balances from VMFXX Vanguard Federal Money Market Fund to VUSXX Vanguard Treasury Money Market Fund due to the fact that VMFXX surprised me this year by making me liable for state taxes by using Repos rather than just holding Treasuries(this was not the case over past decade). Now I see VUSXX has updated their holding and also is now increasingly using Repos after being 100% Treasuries last year. There now is no Vanguard Money Market fund that is just Treasuries without Repo. Need to go to Fidelity FDLXX Treasury Only Money Market Fund. Really disappointed.
mktwizard,

May I know where you find this information? And, how much is it? 5%?

KlangFool
VUSXX Currently holds 24.3% repurchase agreements. See the link below.

https://investor.vanguard.com/investme ... omposition
MrJedi
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Re: VUSXX taxable for state and local now

Post by MrJedi »

I've moved onto autorolling my own 4 week bills at Fidelity. They make it very easy. Also 0% expense ratio and guaranteed to be 100% exempt from state/local tax.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

MrJedi wrote: Fri Mar 10, 2023 7:37 pm I've moved onto autorolling my own 4 week bills at Fidelity. They make it very easy. Also 0% expense ratio and guaranteed to be 100% exempt from state/local tax.
I started doing that too. Just beware that at Fidelity the autoroll will eat up all your funds availability from transaction date to settlement date of the maturing tbill. I buy tbills in a separate brokerage from where I buy ETFs and my Fido CMA I use as a quasi checking account.
xpy1999
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Re: VUSXX taxable for state and local now

Post by xpy1999 »

anon_investor wrote: Fri Mar 10, 2023 7:26 pm
xpy1999 wrote: Fri Mar 10, 2023 7:22 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Good to know. If I want to buy ETFs, I still have to sell FDLXX to settlement fund and wait for the next day, right?
Nope, that is the best part. Fidelity will auto liquidate retail money market funds. Assuming all funds are settled, FDLXX is treated as cash available to trade or withdraw.
Thanks. Great to know.
xpy1999
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Re: VUSXX taxable for state and local now

Post by xpy1999 »

anon_investor wrote: Fri Mar 10, 2023 7:42 pm
MrJedi wrote: Fri Mar 10, 2023 7:37 pm I've moved onto autorolling my own 4 week bills at Fidelity. They make it very easy. Also 0% expense ratio and guaranteed to be 100% exempt from state/local tax.
I started doing that too. Just beware that at Fidelity the autoroll will eat up all your funds availability from transaction date to settlement date of the maturing tbill. I buy tbills in a separate brokerage from where I buy ETFs and my Fido CMA I use as a quasi checking account.
2nd this. Learned it the hard way!!!! I sold some ETF but couldn't buy another to TLH since the settlement account is marked negative due to auto roll!
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Charles Joseph
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Re: VUSXX taxable for state and local now

Post by Charles Joseph »

anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
“The aggregate return of all investors in the market must equal the total return of the market.” - David Swensen.
KlangFool
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Re: VUSXX taxable for state and local now

Post by KlangFool »

Folks,

Thanks for the information!!

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RetireGood
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Re: VUSXX taxable for state and local now

Post by RetireGood »

Hi

Sorry if it should be clear, from above, so VUSXX for taxable year 2023 is now subject to state/local taxes?
Also does a MF need to have 100% treasuries throughout the whole year, for it to be not subject to state/local taxes or is it proportionate?

Thanks
exodusing
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Re: VUSXX taxable for state and local now

Post by exodusing »

RetireGood wrote: Sat Mar 11, 2023 6:39 am Hi

Sorry if it should be clear, from above, so VUSXX for taxable year 2023 is now subject to state/local taxes?
Also does a MF need to have 100% treasuries throughout the whole year, for it to be not subject to state/local taxes or is it proportionate?

Thanks
Given that VUSXX held 23-24% repos at month-end January and February, it appears that a portion of the income will be subject to state/local taxes, at least for states that only exempt direct obligations of the US government. California, Connecticut, and New York require that 50% of the fund’s assets at each quarter-end within the tax year consist of U.S. government obligations. I believe others are proportional, but you should check your state.
RetireGood
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Re: VUSXX taxable for state and local now

Post by RetireGood »

exodusing wrote: Sat Mar 11, 2023 6:44 am Given that VUSXX held 23-24% repos at month-end January and February, it appears that a portion of the income will be subject to state/local taxes, at least for states that only exempt direct obligations of the US government. California, Connecticut, and New York require that 50% of the fund’s assets at each quarter-end within the tax year consist of U.S. government obligations. I believe others are proportional, but you should check your state.
Thanks, I am in CA. So at least 2023'Q1 will be state-tax free.
I need to now go the route of buying T-bills direct at auction.
exodusing
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Re: VUSXX taxable for state and local now

Post by exodusing »

RetireGood wrote: Sat Mar 11, 2023 6:49 am
exodusing wrote: Sat Mar 11, 2023 6:44 am Given that VUSXX held 23-24% repos at month-end January and February, it appears that a portion of the income will be subject to state/local taxes, at least for states that only exempt direct obligations of the US government. California, Connecticut, and New York require that 50% of the fund’s assets at each quarter-end within the tax year consist of U.S. government obligations. I believe others are proportional, but you should check your state.
Thanks, I am in CA. So at least 2023'Q1 will be state-tax free.
I need to now go the route of buying T-bills direct at auction.
I believe the CA test is 50% US gov't obligations at the end of each quarter, so we won't know if the fund qualifies until the end of the year.

I replaced VUSXX with T-bills bought on the secondary market.
alexbogle
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Re: VUSXX taxable for state and local now

Post by alexbogle »

Just want to mention that snsxx is the schwab equivalent to fdlxx. Similar yield after expense ratios.

Does anyone understand what's going on here to explain? Why do these funds switch to repos?
fourniks
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Re: VUSXX taxable for state and local now

Post by fourniks »

GetSmarter wrote: Fri Mar 10, 2023 7:15 pm For 2022 tax purposes, according to Vanguard, VUSXX is considered 100% state tax free. https://www.vanguard.com/pdf/USGOIN_2023.pdf
This is a valuable link, but technically, shouldn't this information be contained within your 1099 from Vanguard?

However, when I go to my 1099, and scroll to the end titled "Mutual Fund and UIT Supplemental Information", it lists all of the US and foreign sourced income percentages for all of my ETFs and MFs except VMFXX?

What gives?
whohasaquestion
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Re: VUSXX taxable for state and local now

Post by whohasaquestion »

Charles Joseph wrote: Fri Mar 10, 2023 7:50 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
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fetch5482
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Re: VUSXX taxable for state and local now

Post by fetch5482 »

fourniks wrote: Sat Mar 11, 2023 8:23 am
GetSmarter wrote: Fri Mar 10, 2023 7:15 pm For 2022 tax purposes, according to Vanguard, VUSXX is considered 100% state tax free. https://www.vanguard.com/pdf/USGOIN_2023.pdf
This is a valuable link, but technically, shouldn't this information be contained within your 1099 from Vanguard?

However, when I go to my 1099, and scroll to the end titled "Mutual Fund and UIT Supplemental Information", it lists all of the US and foreign sourced income percentages for all of my ETFs and MFs except VMFXX?

What gives?
I don't know the reason, but unfortunately, no. The 1099-DIV does not have this information for VUSXX. I had to manually change this in TurboTax to tell that $xxx out of the $yyy I earned as dividend was state tax deductible.
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fetch5482
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Re: VUSXX taxable for state and local now

Post by fetch5482 »

whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Yes, I have FDLXX in my Fidelity account and can confirm it gets auto liquidated. There is a defined order I had read somewhere on r/FidelityInvestment subreddit. The state muni funds and other tax-free MM will liquidate last, any federal money markets will be liquidated first for paying.
If multiple non-core money markets exist, we will draw from the taxable money markets first, then the tax-free money markets. Within each category, we draw from the fund with the highest balance first.
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Charles Joseph
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Re: VUSXX taxable for state and local now

Post by Charles Joseph »

whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm
Charles Joseph wrote: Fri Mar 10, 2023 7:50 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Absolutely. As long as it's settled funds.
“The aggregate return of all investors in the market must equal the total return of the market.” - David Swensen.
Tg1228
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Re: VUSXX taxable for state and local now

Post by Tg1228 »

anon_investor wrote: Fri Mar 10, 2023 7:09 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
At Merrill Edge I keep my cash in TTTXX. At Fidelity I keep my funds meant to pay for current expenses in FDLXX, longer term savings at Fidelity are keep in autorolled T-Bills.
Is TTTXX state tax exempt?
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

Tg1228 wrote: Sat Mar 11, 2023 4:08 pm
anon_investor wrote: Fri Mar 10, 2023 7:09 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
At Merrill Edge I keep my cash in TTTXX. At Fidelity I keep my funds meant to pay for current expenses in FDLXX, longer term savings at Fidelity are keep in autorolled T-Bills.
Is TTTXX state tax exempt?
It currently only holds US treasury debt, and was over 96% exempt from state/local taxes in 2022. Current yield is 4.49%.
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fetch5482
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Re: VUSXX taxable for state and local now

Post by fetch5482 »

Charles Joseph wrote: Sat Mar 11, 2023 4:00 pm
whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm
Charles Joseph wrote: Fri Mar 10, 2023 7:50 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Absolutely. As long as it's settled funds.
I skipped CMA all together and opened a dedicated brokerage account for my cash/checking needs. If you are coded as "private client group" (which I am), then you get the same worldwide ATM benefits and check writing benefits in a brokerage account, but atleast you can configure a better core fund account on them than what you can in CMA (before you buy FDLXX).
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
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Charles Joseph
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Re: VUSXX taxable for state and local now

Post by Charles Joseph »

fetch5482 wrote: Sat Mar 11, 2023 4:16 pm
Charles Joseph wrote: Sat Mar 11, 2023 4:00 pm
whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm
Charles Joseph wrote: Fri Mar 10, 2023 7:50 pm
anon_investor wrote: Fri Mar 10, 2023 7:10 pm

FDLXX is useful if you use Fidelity like a checking account, since Fidelity will autoluqidate it to satisfy any payments.
Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Absolutely. As long as it's settled funds.
I skipped CMA all together and opened a dedicated brokerage account for my cash/checking needs. If you are coded as "private client group" (which I am), then you get the same worldwide ATM benefits and check writing benefits in a brokerage account, but atleast you can configure a better core fund account on them than what you can in CMA (before you buy FDLXX).
I am not a private client. My CMA is my brokerage account. I consolidated the two a while ago. Purchasing FDLXX is easy enough. I keep a relatively small amount of cash in FDLXX in cash for spending and the rest in laddered T-Bills, as well as VUSXX over at Vanguard.
“The aggregate return of all investors in the market must equal the total return of the market.” - David Swensen.
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

Charles Joseph wrote: Sat Mar 11, 2023 5:17 pm
fetch5482 wrote: Sat Mar 11, 2023 4:16 pm
Charles Joseph wrote: Sat Mar 11, 2023 4:00 pm
whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm
Charles Joseph wrote: Fri Mar 10, 2023 7:50 pm

Yes. I have a 4.25% checking account right now (or more accurately, a cash account, since I write one check a year). Fidelity CMA is great.
I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Absolutely. As long as it's settled funds.
I skipped CMA all together and opened a dedicated brokerage account for my cash/checking needs. If you are coded as "private client group" (which I am), then you get the same worldwide ATM benefits and check writing benefits in a brokerage account, but atleast you can configure a better core fund account on them than what you can in CMA (before you buy FDLXX).
I am not a private client. My CMA is my brokerage account. I consolidated the two a while ago. Purchasing FDLXX is easy enough. I keep a relatively small amount of cash in FDLXX in cash for spending and the rest in laddered T-Bills, as well as VUSXX over at Vanguard.
Be careful if you autoroll tbills, your available funda will temporarily eaten up by the autoroll. This is why I autoroll tbills in a separate brokerage account.
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Charles Joseph
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Re: VUSXX taxable for state and local now

Post by Charles Joseph »

anon_investor wrote: Sat Mar 11, 2023 5:22 pm
Charles Joseph wrote: Sat Mar 11, 2023 5:17 pm
fetch5482 wrote: Sat Mar 11, 2023 4:16 pm
Charles Joseph wrote: Sat Mar 11, 2023 4:00 pm
whohasaquestion wrote: Sat Mar 11, 2023 2:22 pm

I have a CMA account too. Can I safely assume FDLXX will auto liquidate if I withdraw cash from ATM?
Absolutely. As long as it's settled funds.
I skipped CMA all together and opened a dedicated brokerage account for my cash/checking needs. If you are coded as "private client group" (which I am), then you get the same worldwide ATM benefits and check writing benefits in a brokerage account, but atleast you can configure a better core fund account on them than what you can in CMA (before you buy FDLXX).
I am not a private client. My CMA is my brokerage account. I consolidated the two a while ago. Purchasing FDLXX is easy enough. I keep a relatively small amount of cash in FDLXX in cash for spending and the rest in laddered T-Bills, as well as VUSXX over at Vanguard.
Be careful if you autoroll tbills, your available funda will temporarily eaten up by the autoroll. This is why I autoroll tbills in a separate brokerage account.
I just saw that today (upthread here, I think). I don't autoroll. I buy in the secondary market. But that's good to know! Thanks.
“The aggregate return of all investors in the market must equal the total return of the market.” - David Swensen.
Tg1228
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Re: VUSXX taxable for state and local now

Post by Tg1228 »

anon_investor wrote: Sat Mar 11, 2023 4:15 pm
Tg1228 wrote: Sat Mar 11, 2023 4:08 pm
anon_investor wrote: Fri Mar 10, 2023 7:09 pm
xpy1999 wrote: Fri Mar 10, 2023 7:04 pm Or buy t bill directly.

FDLXX 0.42% expense ratio is kinda high.
At Merrill Edge I keep my cash in TTTXX. At Fidelity I keep my funds meant to pay for current expenses in FDLXX, longer term savings at Fidelity are keep in autorolled T-Bills.
Is TTTXX state tax exempt?
It currently only holds US treasury debt, and was over 96% exempt from state/local taxes in 2022. Current yield is 4.49%.
Thank you!!
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mktwizard
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Re: VUSXX taxable for state and local now

Post by mktwizard »

I'm glad people are paying attention. it's very disappointing that Vanguard is doing this to us (at least for high tax states). Unfortunately or fortunately, I think the optimal solution is to buy T-bills at auction with Vanguard as others have posted. You can find youtube videos on how to do this step by step and its definitely worth the extra yield and tax deductibility. Worth the effort and once you've done it a few times you realize it's easy and you've been leaving money on the table. Good Luck!!
retiringwhen
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Re: VUSXX taxable for state and local now

Post by retiringwhen »

Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
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anon_investor
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Re: VUSXX taxable for state and local now

Post by anon_investor »

retiringwhen wrote: Sun Mar 12, 2023 9:22 pm Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
In a high tax state, VUSXX may not beat out some other treasury only money market funds (e.g. TTTXX, UTIXX, FSIXX) anymore.
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Re: VUSXX taxable for state and local now

Post by retiringwhen »

anon_investor wrote: Sun Mar 12, 2023 10:16 pm
retiringwhen wrote: Sun Mar 12, 2023 9:22 pm Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
In a high tax state, VUSXX may not beat out some other treasury only money market funds (e.g. TTTXX, UTIXX, FSIXX) anymore.
Show me a fund after taxes and not before fees removed that is beating it. I would like to Build a competitive list of treasury funds. Let’s do the math and find out.
RetireGood
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Re: VUSXX taxable for state and local now

Post by RetireGood »

Hi

I will schedule the sell VUSXX today/Monday and buy the individual 4/8/17 week auction bills, that are up for auction this Tuesday.

Is there any way to have VG directly liquidate VUSXX and buy the satisfy the T-Bill auction buys?
Also when is the earliest/latest, I can have orders in for the auction bills, is it Announce/settlement date or Auction/settlement dates?

Thanks
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Re: VUSXX taxable for state and local now

Post by indexfundfan »

retiringwhen wrote: Mon Mar 13, 2023 5:25 am
anon_investor wrote: Sun Mar 12, 2023 10:16 pm
retiringwhen wrote: Sun Mar 12, 2023 9:22 pm Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
In a high tax state, VUSXX may not beat out some other treasury only money market funds (e.g. TTTXX, UTIXX, FSIXX) anymore.
Show me a fund after taxes and not before fees removed that is beating it. I would like to Build a competitive list of treasury funds. Let’s do the math and find out.
GABXX might be a possibility. It's available at Etrade with a minimum of $10k purchase. It's ER is 1 basis point lower than VUSXX and it seems to be holding treasuries only.
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exodusing
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Re: VUSXX taxable for state and local now

Post by exodusing »

retiringwhen wrote: Sun Mar 12, 2023 9:22 pm Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
My concern is that VUSXX will be significantly below 100%, not that it will fail the 50% test. My point of comparison is short-term treasuries rather than other MM funds. Buying treasuries is rather low effort. I'm not seeing any major advantage to VUSXX over t-bills.

My bond funds include a variety of durations. For example, I have (or did until I started switching) a MM, short-term muni, limited-term muni, etc. I can match durations of some of these with treasuries and get enough extra after-tax yield that it's worth the effort. The funds I'd sell now have high enough bases that I'll have capital loses, which adds to the appeal of switching. I'll have to see what Friday's turmoil has done to rates before continuing with this project.
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Re: VUSXX taxable for state and local now

Post by anon_investor »

retiringwhen wrote: Mon Mar 13, 2023 5:25 am
anon_investor wrote: Sun Mar 12, 2023 10:16 pm
retiringwhen wrote: Sun Mar 12, 2023 9:22 pm Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".
In a high tax state, VUSXX may not beat out some other treasury only money market funds (e.g. TTTXX, UTIXX, FSIXX) anymore.
Show me a fund after taxes and not before fees removed that is beating it. I would like to Build a competitive list of treasury funds. Let’s do the math and find out.
I did listed 3 that you can buy at Merrill Edge with only $1k minimum:
TTTXX 4.49%, 100% treasury debt (as of 3/10/2023)
UTIXX 4.43%, 100% treasury debt (as of 3/12/2023)
FSIXX 4.47%, 100% treasury debt (as of 3/10/2023)

Versus VUSXX 4.56%, 75.7% treasury debt (as 2/28/2023)

(All yields listed are 7 day yields, which of course are net of ER.)

Obviously YMMV depending on state/local income tax rate, but for folks in higher tax situations VUSXX is no longer the clear winner as it was last year.
retiringwhen
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Re: VUSXX taxable for state and local now

Post by retiringwhen »

indexfundfan wrote: Mon Mar 13, 2023 5:47 am GABXX might be a possibility. It's available at Etrade with a minimum of $10k purchase. It's ER is 1 basis point lower than VUSXX and it seems to be holding treasuries only.
Nice yield, excellent ER. I can't find any documentation of their actual holding after 12/31/2022. If compared to to VUSXX, they are the same on the same date. Also, anyone know where to find their report on % USGO for tax year 2022?

Note, this funds' prospectus is explicit that they will invest in Repos.

I am applying the same rules to all the funds. I need the following information:
- current SEC Yield (last 7 days)
- holdings as of the end of the most recent month. This fund only reports 12/31/2022 and not JAN or FEB yet.
- Reported USGO % for last tax year (2022).
- Reported weighted average maturity (recent)
- Minimum Investment - and where it can be purchased.

I went to Gabelli's site:https://www.gabelli.com/funds/money_markets/404
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Re: VUSXX taxable for state and local now

Post by indexfundfan »

retiringwhen wrote: Mon Mar 13, 2023 7:43 am
indexfundfan wrote: Mon Mar 13, 2023 5:47 am GABXX might be a possibility. It's available at Etrade with a minimum of $10k purchase. It's ER is 1 basis point lower than VUSXX and it seems to be holding treasuries only.
Nice yield, excellent ER. I can't find any documentation of their actual holding after 12/31/2022. If compared to to VUSXX, they are the same on the same date. Also, anyone know where to find their report on % USGO for tax year 2022?

Note, this funds' prospectus is explicit that they will invest in Repos.

I am applying the same rules to all the funds. I need the following information:
- current SEC Yield (last 7 days)
- holdings as of the end of the most recent month. This fund only reports 12/31/2022 and not JAN or FEB yet.
- Reported USGO % for last tax year (2022).
- Reported weighted average maturity (recent)
- Minimum Investment - and where it can be purchased.

I went to Gabelli's site:https://www.gabelli.com/funds/money_markets/404
Recent information for GABXX is hard to find. I couldn't find any document listing the USGO percentage in 2022.

The prospectus does allow the fund to purchase repos, but it does not hold any repos as of the 2/28/23 SEC filing:

https://www.sec.gov/Archives/edgar/data ... ry_doc.xml

For comparison, you will see VUSXX holding 24.36% repos in the filing (scroll to near the end of the page):

https://www.sec.gov/Archives/edgar/data ... ry_doc.xml
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Re: VUSXX taxable for state and local now

Post by exodusing »

I believe every treasury MM fund's prospectus allows the fund to hold repos. Since allowable investments appear to be the same for all of these, I wonder if there's something in the regulations on the subject.
retiringwhen
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Re: VUSXX taxable for state and local now

Post by retiringwhen »

Here are the after tax rates for the Treasury MM funds mentioned above.

the Fidelity FSIXX is the clear winner if you have access. The Gabelli fund is an oddball with high duration/life vs. the rest, but is also very good rates though.

Otherwise Vanguard is still very good after tax rates even at the very highest state tax rates. It only gets more attractive as rate drop. Ironically, most folks in the 10+% state tax rate are better off with Munis.


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