Exchanging VTIAX for VFWAX question

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AlwaysaQ
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Exchanging VTIAX for VFWAX question

Post by AlwaysaQ » Fri Jun 01, 2012 11:30 am

I have 3 lots of VTIAX all of which are underwater. If I EXCHANGE all 3 using specific id for the sale will Vanguard batch the proceeds and purchase 1 lot of VFWAX? None of the lots are worth $10000.

YDNAL
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Re: Exchanging VTIAX for VFWAX question

Post by YDNAL » Fri Jun 01, 2012 11:41 am

AlwaysaQ wrote:I have 3 lots of VTIAX all of which are underwater. If I EXCHANGE all 3 using specific id for the sale will Vanguard batch the proceeds and purchase 1 lot of VFWAX? None of the lots are worth $10000.
Yes, VFWAX if 3 lots of VTIAX are over $10K combined.

Since it appears that you want to TLH, make sure that NONE of the 3 lots of VTIAX were purchased in the last 30 days.
http://www.bogleheads.org/forum/viewtop ... =1&t=97265
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AlwaysaQ
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Re: Exchanging VTIAX for VFWAX question

Post by AlwaysaQ » Fri Jun 01, 2012 12:35 pm

YDNAL,

In the past when I have sold shares of a fund in my taxable space I have sold all the shares I had and therefore defaulted to FIFO. Can I now use specific id to sell shares in one of the funds I had previously sold out since I have built a new position in the fund?

My 3 lots of VTIAX combined are over $10,000 and the last was purchased in April. Vanguard has dropped the two month holding period on that fund.

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FlyHi
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Re: Exchanging VTIAX for VFWAX question

Post by FlyHi » Fri Jun 01, 2012 12:47 pm

Are you changing your AA? VWIAX is 4% Non-U.S. stock and 60% bonds while VFWAX is 96.5% non-U.S. stocks, this is an apples to oranges exchange!
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AlwaysaQ
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Re: Exchanging VTIAX for VFWAX question

Post by AlwaysaQ » Fri Jun 01, 2012 12:52 pm

Not VWIAX but VTIAX - Total International to FTSE AllWorld ex US.

livesoft
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Re: Exchanging VTIAX for VFWAX question

Post by livesoft » Fri Jun 01, 2012 1:00 pm

YDNAL wrote:...
Since it appears that you want to TLH, make sure that NONE of the 3 lots of VTIAX were purchased in the last 30 days.
http://www.bogleheads.org/forum/viewtop ... =1&t=97265
No there would not be a wash sale. And even if there was a wash sale, PLEASE NOTE:

1. Wash sales are NOT ILLEGAL.
2. Wash sales simply DEFER the loss on your tax return until the replacement shares are sold (unless replacement shares are purchased in an IRA).

Please READ: http://www.fairmark.com/capgain/wash/ and the links there-in.
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YDNAL
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Re: Exchanging VTIAX for VFWAX question

Post by YDNAL » Fri Jun 01, 2012 2:03 pm

livesoft wrote:
YDNAL wrote:...
Since it appears that you want to TLH, make sure that NONE of the 3 lots of VTIAX were purchased in the last 30 days.
http://www.bogleheads.org/forum/viewtop ... =1&t=97265
No there would not be a wash sale.
The quote (clearly, I may add) says to make sure NONE of the 3 lots were purchased in the last 30 days.

Yes, if that were the case, THERE IS a wash sale, and I warned the OP on it.
livesoft wrote:And even if there was a wash sale, PLEASE NOTE:

1. Wash sales are NOT ILLEGAL.
2. Wash sales simply DEFER the loss on your tax return until the replacement shares are sold (unless replacement shares are purchased in an IRA).

Please READ: http://www.fairmark.com/capgain/wash/ and the links there-in.
1. Nothing has been said re: ILLEGALITY in the quote above.

2. My source for tax issues is the IRS not Fairmark.
IRS wrote:A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
  1. Buy substantially identical stock or securities,
  2. Acquire substantially identical stock or securities in a fully taxable trade,
  3. Acquire a contract or option to buy substantially identical stock or securities, or
  4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
http://www.irs.gov/publications/p550/ch ... k100010601
IRS, pg 84 wrote:Wash sale: A sale of stock or securities at a loss within 30 days before or after you buy or acquire in a fully taxable trade, or acquire a contract or option to buy, substially identical stock or securities.

http://www.irs.gov/pub/irs-pdf/p550.pdf
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livesoft
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Re: Exchanging VTIAX for VFWAX question

Post by livesoft » Fri Jun 01, 2012 2:10 pm

OK, the so-called wash sale in that case does not defer nor disallow any loss beyond the sale of the last lot purchased. In other words, no big deal, since one still gets to deduct completely all the losses.
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YDNAL
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Re: Exchanging VTIAX for VFWAX question

Post by YDNAL » Sat Jun 02, 2012 5:55 am

livesoft wrote:OK, the so-called wash sale in that case does not defer nor disallow any loss beyond the sale of the last lot purchased. In other words, no big deal, since one still gets to deduct completely all the losses.
There is quite a difference between downplaying a "so-called wash sale" and challenging my (correct) input with a resounding "No there would not be a wash sale."
YDNAL wrote:
livesoft wrote:
YDNAL wrote:... Since it appears that you want to TLH, make sure that NONE of the 3 lots of VTIAX were purchased in the last 30 days.
http://www.bogleheads.org/forum/viewtop ... =1&t=97265
No there would not be a wash sale.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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