tax loss harvest Help! Total Intnl ???

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floatingdoc
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tax loss harvest Help! Total Intnl ???

Post by floatingdoc »

Hi,

I have 37k in losses in my taxable account for total international index. What can I switch into that will be substantially "different" yet will not trigger a wash sale. Despite an overall yearly loss in my portfolio, I am showing a 35k short term gain due to selling 2030 fund in april at the top of the market recently.
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Higman
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Higman »

Switch into Vanguard FTSE All World ex-US Index. This will preserve your current international asset allocation and since it tracks a different index than Total International there should be no IRS wash rules issue.
livesoft
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by livesoft »

Once again, you do not have to buy something substantially "different". That's not the IRS term for it.
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floatingdoc
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by floatingdoc »

has anyone done this in the past, has the change to ftse all world ex us ever been disallowed by vanguard as a wash sale?
livesoft
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by livesoft »

Vanguard does not make such decisions. It is the IRS that might make that kind of decision. Past responses on this forum show that no one has reported being called out or audited on a wash sale. No one.

Please also remember that a wash sale is not illegal.

I personally would have no problems selling Total Int'l Index at a loss and buying FTSE-all-world-ex-US index immediately.
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Boglenaut
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Boglenaut »

livesoft wrote:
I personally would have no problems selling Total Int'l Index at a loss and buying FTSE-all-world-ex-US index immediately.
+1

One contains small caps and the other does not. They hold a different number of securities. They have different expense ratios. They follow different indices. I don't think anyone would claim they are substatially identical.

FloatingDoc, if they give you a hard time tell them anonymous people on the internet said it was fine. :wink: :wink:
sscritic
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by sscritic »

Boglenaut wrote: FloatingDoc, if they [the IRS] give you a hard time tell them anonymous people on the internet said it was fine. :wink: :wink:
Best answer of the week or maybe the month! I always quote anonymous people on the internet when responding to IRS audits. :)
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floatingdoc
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by floatingdoc »

That is funny as hell, thanks for the help!
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Boglenaut
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Boglenaut »

floatingdoc wrote:That is funny as hell, thanks for the help!
The "financial advice from anonymous people on the internet" joke is a recurring item on this forum... I am not sure who typed it first.
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floatingdoc
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by floatingdoc »

Actually Livesoft,

Vanguard does in fact state whether or not they were wash sales. If you go under capital gains and taxes section of website, it will tell you if they disallowed part of the loss as a wash sale.
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Boglenaut
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Boglenaut »

floatingdoc wrote:Actually Livesoft,

Vanguard does in fact state whether or not they were wash sales. If you go under capital gains and taxes section of website, it will tell you if they disallowed part of the loss as a wash sale.
But do you see it only after the sale?

Maybe call VG and ask if it will show as a wash sale, just to be safe.
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empb
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by empb »

floatingdoc wrote:Actually Livesoft,

Vanguard does in fact state whether or not they were wash sales. If you go under capital gains and taxes section of website, it will tell you if they disallowed part of the loss as a wash sale.
They haven't compared all the securities in the universe against each other, surely it's only explicitly flagged a wash sale if there's no doubt about it, i.e., you sold and bought the very same ticker symbol.
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jasonlitka
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by jasonlitka »

floatingdoc wrote:has anyone done this in the past, has the change to ftse all world ex us ever been disallowed by vanguard as a wash sale?
I switched earlier this year from Total Int to FTSE (big loss), then waited 60 days and switched back (small loss).
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fewmoreyears
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by fewmoreyears »

I exchanged between Total Intl and FTSE for TLH with no indication from Vanguard of any wash sale issues. But they did flag a wash sale when I sold and bought within a 30 day period (my screw up) to the same fund.
Chuck1
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Chuck1 »

Thanks guys - this thread is helpful as this is a question i have had before as well.

Any further comments on selling Tax-Managed International (VTMGX) and buying FTSE All-World Ex US (VFWAX)? I assume this also would not be a wash sale per the authorities of the anonymous investment forum???
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Groundhog
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by Groundhog »

jasonlitka wrote:I switched earlier this year from Total Int to FTSE (big loss), then waited 60 days and switched back (small loss).
Same here.
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SSSS
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by SSSS »

sscritic wrote:
Boglenaut wrote: FloatingDoc, if they [the IRS] give you a hard time tell them anonymous people on the internet said it was fine. :wink: :wink:
Best answer of the week or maybe the month! I always quote anonymous people on the internet when responding to IRS audits. :)
Don't say the word "anonymous" around government officials; you'll probably end up in Gitmo.
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SSSS
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by SSSS »

floatingdoc wrote:Actually Livesoft,

Vanguard does in fact state whether or not they were wash sales. If you go under capital gains and taxes section of website, it will tell you if they disallowed part of the loss as a wash sale.
That's only for selling & then buying the exact same fund.
rockH
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Re: tax loss harvest HELP! TOTAL INTNL ???

Post by rockH »

I did that exact trade today - sold Total Intl to harvest loss (purchased Jan 2011) and bought FTSE ex-US. Boglenaut and others got it right, its not even close to being considered the same fund.

Because of Total Intl's advantages, especially including small caps and significantly larger number of different stocks at essentially the same expense ratio (18 bps vs 20 for Admiral), I'll be swapping back to Total Intl after the wash sale period is over (30 days), the Vanguard FTSE 2% redemption fee period is over (2 months) and the Total Int'l frequent trading restrictions period is over (2 months). So not til late February. Or if it's skyrocketed I'll just hold FTSE.

Have done this same trade in the past (late 2008 and early 2009) to harvest losses in several accounts (mine and other family members) with no IRS issues.

RH
DetroitRed
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Re: tax loss harvest Help! Total Intnl ???

Post by DetroitRed »

Also, be very careful if any of the funds you are selling are regularly purchased by you in your 401k or IRA. I purchase Total Intl monthly in my 401k and it causes all sorts of hoops when I need to plan for TLH.
If you hold the same fund in your IRA or 401(k) as in your taxable account, make sure that there are no recent contributions to that fund if you might want to sell your taxable fund at a loss. http://www.bogleheads.org/wiki/Wash_sale
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