TLH for absolute dummies [Tax Loss Harvesting]

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Tue Sep 01, 2015 2:35 pm

I am retired. TLH saves me on taxes. A lot.
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Tue Sep 01, 2015 3:10 pm

livesoft wrote:Do what you want. Do what you need to do. :)

If the drops become substantial, then by all means TLH again, but a 3% drop is not substantial to me at the moment. It could be for you though.
Combined with the losses from Friday, it was enough (for me). Realized about another $6200 in losses. I'm happy to be in VTCLX instead of VTSAX (almost wondering why I wasn't there before), and in .82 VTMGX + .18 VEMAX instead of VTIAX, so if this is forever that's ok by me. And I'm now set for the next 5 years. ;)

It's funny how saving $5000 in taxes over 5 years can make me not feel the sting of "losing" about $85,000 in a couple of weeks!

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Tue Sep 01, 2015 3:18 pm

^You will feel 10 times better when you lose $850,000 in a couple of weeks.
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Tue Sep 01, 2015 3:20 pm

livesoft wrote:^You will feel 10 times better when you lose $850,000 in a couple of weeks.
LOL!

prototype
Posts: 6
Joined: Tue Jul 29, 2014 3:07 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by prototype » Tue Sep 01, 2015 7:34 pm

Roothy wrote:

.......................

Step 3:
Beware if you have other accounts with substantially identical Funds, as these might trigger wash sales. If there are "substantially identical" funds in either your *or your spouse's* other *taxable* accounts, you will definitely risk triggering wash sales. Any substantially identical Funds in you or your spouse's *IRAs* (Roth or traditional) will also risk triggering wash sales. However, substantially identical Funds held in employer-controlled tax advantaged accounts (like 401(k)s, 403(b)s, or 457(b)s) probably will *not*. Probably. There has been no explicit guidance on this issue from the IRS and there are differences of opinion on bogleheads. Many bogleheads go ahead and TLH without worrying about the risk of triggering wash sales from whatever they holding in their employer-sponsored tax-advantaged accounts. But if you want to be super safe, make sure that any Funds in your other accounts (*all* of them) are not substantially identical to those in your taxable accounts that you are about to TLH; then you will ensure no conflicts (but you will also be adding some complication and work). Another safe move is to discontinue automatic investments into these tax-advantaged accounts for 30 days before and 31 days after the TLH--but for obvious reasons, for most people this is not a reasonable solution.

.........................

Wow, I'm glad I read Roothy's OP, especially step 3 so I just quoted that part of the post.

I'm a newbie to this whole TLH process and was getting ready to do a full Exchange of my VTIAX to VFWAX in my Vanguard After-Tax Account to get a ~$4K TLH. I would have never thought about that fact that I also have VTIAX in my Vanguard Pre-Tax IRA with all the distributions getting reinvested in VTIAX. All distributions from my After-Tax Account have always gone to my bank vs. being re-invested.

Anyway I just called Vanguard and talked to someone (my assigned Vanguard FA person was not available). They said yes I should change the distributions from my VTIAX Fund in my Pre-Tax tIRA from Reinvest to buying a different fund, which I just did (VBTLX for now). I hope that takes effect before late Sept. distro's.

So I think I'm OK to execute the exchange now since the last VTIAX distro's (in my case, share purchases in my tIRA and deposits to my bank for my after tax account) where in late July.

Why does everything have to be so complicated? :confused

Thanks to everyone who has posted here and on other threads on the finer points of Tax Loss Harvesting and avoiding wash sales.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Wed Sep 02, 2015 9:44 am

I'm delighted the post was of some help. :)

I like the flow chart being developed above, too. But I have questions about it: What does Thanksgiving have to do with anything? Why 3% of the total value of the holding? Why wait until you've owned the instrument for at least 11 months?

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Wed Sep 02, 2015 10:01 am

Roothy wrote:I'm delighted the post was of some help. :)

I like the flow chart being developed above, too. But I have questions about it: What does Thanksgiving have to do with anything? Why 3% of the total value of the holding? Why wait until you've owned the instrument for at least 11 months?
You wouldn't wait for at least 11 months in most cases. In what cases are Thanksgiving and/or 11 months used? :)
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Wed Sep 02, 2015 10:11 am

livesoft wrote:
Roothy wrote:I'm delighted the post was of some help. :)

I like the flow chart being developed above, too. But I have questions about it: What does Thanksgiving have to do with anything? Why 3% of the total value of the holding? Why wait until you've owned the instrument for at least 11 months?
You wouldn't wait for at least 11 months in most cases. In what cases are Thanksgiving and/or 11 months used? :)
I'm referring to this from the flowchart (but I got the flow a big tangled in my head, I suspect. Still, I don't understand the touchstones):

For all the shares with a lower price, what percentage is the sum of the loss compared to the value of those shares?

Less than 3%? -
Yes. Is it before Thanksgiving? -
Yes. Have you owned these shares less than 11 months?
Yes. Stop here. It may be better to wait to TLH these shares.
No, continue below

EnjoyIt
Posts: 3391
Joined: Sun Dec 29, 2013 8:06 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by EnjoyIt » Wed Sep 02, 2015 12:11 pm

subscribed

Thank you all for the work you are putting in.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Wed Sep 02, 2015 12:35 pm

Revision:

I put on my "TurboTax/IRS language hat" and wrote out this [unfinished] TLH algorithm draft which I am submitting here for comments:

This algorithm draft is not a substitue for consulting your own tax advisor for help with tax-loss harvesting and potential wash sales.


Do you have any shares in your taxable account that have a price lower than what you paid for them?

No - Stop here, you do not have a harvestable loss for tax purposes.

Yes -
Are these shares for a tax-exempt fund?
Yes - Stop here. This algorithm does not work for such shares. Please consult your tax advisor for help.
No - Continue on.

For all the shares with a lower price, how much is the sum of the losses of the shares?

Less than $500 - Stop here, it is probably not worth harvesting this loss for you.

$500 or more? Proceed with the following questions:

For all the shares with a lower price, what percentage is the sum of the loss compared to the value of those shares?

Less than 3%? -
Yes. Have you owned these shares less than 11 months?
Yes. Is it before Thanksgiving? -
Yes. Stop here. It may be better to wait to TLH these shares.
No, continue below

3% or more loss or you answered No - You have a loss that may be worthwhile harvesting, so let's check some other things about a potential wash sale.

If you sell these shares, will you still have in your possession OTHER shares?
(OTHER shares mean shares of substantially identical securities in your taxable
accounts, your IRAs, your spouse's IRAs, your spouse's taxable accounts,
joint accounts, your minor children's accounts, etc.):

No. - No problem with wash sale, continue below.
Yes. - OK, were these OTHER shares purchased in the same transaction as
the shares you are selling? Yes, then no wash sale, continue below.
No. - OK were these OTHER shares purchased more than 30 (31?) days ago?
(Even from reinvesting dividends which really are a share purchase)
Yes, then no wash sale, continue below.
No. - You will create a wash sale if you sell your shares, UNLESS you sell the shares
that were purchased in the previous 30 days. A wash sale is NOT illegal, but maybe you want to avoid it. Let's check out some things to help you to avoid a wash sale.

Do you wish now to sell all the shares purchased in the previous 30 days?

Yes. - OK. Are some of these shares in a tax-advantaged account like an IRA?
Yes. You must sell them in a separate transaction at least one day before you sell the shares in your taxable account.
Are some of these shares in a taxable account like your account or your spouse's account or a joint account?
Yes. - OK, you have some recently previously acquired shares are in a taxable account. Will you sell these shares in the same transaction as the shares you are selling for a loss?
Yes, then no wash sale. Continue below.
No. STOP HERE unless you sell these share BEFORE you sell your other shares at a loss or if
you do not mind creating a possible wash sale. Remember: A wash sale is NOT illegal. The disallowed loss from selling shares in a taxable account at a loss will be added to the basis of the shares that are creating the wash sale, but ONLY IF those shares are held in a taxable account. When you sell those shares later, you will realize the disallowed loss and that is whether you sell the shares at a gain or a loss. For instance, you may wish to create a wash sale today, then sell the shares that created the wash sale tomorrow.


If you decide to sell your shares at a loss, you MUST ALSO avoid creating a
wash sale AFTER you have sold your shares at a loss. Let's check that now.

If you sell these shares, will you purchase in the 30 days after you sell these shares OTHER substantially identical shares in any amount greater than zero shares (even 0.001 shares)? (This includes reinvested dividends.)
(OTHER shares mean shares of substantially identical securities in your taxable
accounts, your IRAs, your spouse's IRAs, your spouse's taxable accounts,
joint accounts, your minor children's accounts, etc.):

No. - No problem with wash sale, continue below.
Yes. - It seems you will create a wash sale unless you do not purchase
these other shares. You must stop yourself from purchasing these
OTHER shares (for all accounts: turn off automatic purchases,
turn off automatic dividend reinvestment, etc).

- No WASH SALE and a harvestable loss. Continue.

Did your shares distribute a qualified dividend?
- No. Continue below.

- Yes, have you held the shares that paid a dividend for the personal holding period (at least 61 days including the day you intend to sell the share), so that the dividend remains qualified to you? Or do you not care if the qualified part of the dividend is switched from qualified to non-qualified? You can still continue without creating a wash sale, but you may have a slight increase in taxes if some of the dividend is switched from qualified to non-qualified.

Do you wish to buy REPLACEMENT shares of something that is SIMILAR, but not SUBSTANTIALLY IDENTICAL in order to maintain your asset allocation or for another reason?

- No. OK, sell your shares with a harvestable loss. You are done. Stop here.
- Yes. OK, you need to choose the investment you wish to use for the REPLACEMENT shares.


REPLACEMENT SHARES
yet to be written
Last edited by livesoft on Mon Jan 18, 2016 12:02 pm, edited 3 times in total.
Wiki This signature message sponsored by sscritic: Learn to fish.

retiredjg
Posts: 39380
Joined: Thu Jan 10, 2008 12:56 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by retiredjg » Wed Sep 02, 2015 12:55 pm

livesoft wrote:For all the shares with a lower price, what percentage is the sum of the loss compared to the value of those shares?
Should be "sum of the losses".

This version is probably a little more accurate, but also more confusing. I'm not sure there is a solution to that because of the nature of the subject.

jrtexas
Posts: 150
Joined: Tue Feb 10, 2015 2:19 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by jrtexas » Wed Sep 02, 2015 1:21 pm

Whats so simple about this. I thought everyone here was a "long term" investor. Why worry about tax losses, if your not selling?

nalor511
Posts: 527
Joined: Mon Jul 27, 2015 1:00 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by nalor511 » Wed Sep 02, 2015 2:19 pm

"You must sell them in a separate transaction at least one day before you sell the shares in your taxable account."

Where is the bolded portion, "one day before" coming from when selling shares in an IRA purchased within the last 30 days and you want to TLH from the same fund in your taxable account, e.g. why can't you run the IRA sale in the same day, but 'before' the taxable sale?

retiredjg
Posts: 39380
Joined: Thu Jan 10, 2008 12:56 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by retiredjg » Wed Sep 02, 2015 3:03 pm

jrtexas wrote:Whats so simple about this. I thought everyone here was a "long term" investor. Why worry about tax losses, if your not selling?
People are not worried about tax losses. They are collecting them in order to reduce their future income taxes. You can do this in two ways - either by balancing their gains against losses (no tax on the gains) or by taking $3k a year off their taxable income (saving tax on $3k a year until the losses are "used up").

A person can harvest losses and still be a long term investor. Being long term doesn't mean you have to keep the exact same shares of what you bought. Being long term means sticking with a stock to bond ratio over time as your plan dictates.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Wed Sep 02, 2015 3:04 pm

nalor511 wrote:"You must sell them in a separate transaction at least one day before you sell the shares in your taxable account."

Where is the bolded portion, "one day before" coming from when selling shares in an IRA purchased within the last 30 days and you want to TLH from the same fund in your taxable account, e.g. why can't you run the IRA sale in the same day, but 'before' the taxable sale?
How do you make sure it is "before"? What records would prove that? Would your broker cooperate with the record keeping and reporting to the IRS or other authority? The record keeping that I have seen only goes down to the day and not the hour, minute, second. Yes, I know that the time of trade of an ETF or stock is available when it happens, but that time stamp is not shown on your 1099-B nor annual statement to my knowledge.

Because you own the shares still on the day you sell in your taxable account and that would create a wash sale.

Maybe when I have the opportunity, I will create wash sales in a Vanguard account via a related IRA. Then I can report what Vanguard tries to report. Of course, anybody else can jump right in and see if Vanguard is on the ball, too.
Wiki This signature message sponsored by sscritic: Learn to fish.

jrtexas
Posts: 150
Joined: Tue Feb 10, 2015 2:19 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by jrtexas » Wed Sep 02, 2015 3:30 pm

retiredjg wrote:
jrtexas wrote:Whats so simple about this. I thought everyone here was a "long term" investor. Why worry about tax losses, if your not selling?
People are not worried about tax losses. They are collecting them in order to reduce their future income taxes. You can do this in two ways - either by balancing their gains against losses (no tax on the gains) or by taking $3k a year off their taxable income (saving tax on $3k a year until the losses are "used up").

A person can harvest losses and still be a long term investor. Being long term doesn't mean you have to keep the exact same shares of what you bought. Being long term means sticking with a stock to bond ratio over time as your plan dictates.
Ok. Makes me understand better. As long as I sell and don't buy into a similar fund? Correct? But if I do so in my 457 or IRA, those
are tax free? Correct. So I basically just take the loss and buy into something else?

retiredjg
Posts: 39380
Joined: Thu Jan 10, 2008 12:56 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by retiredjg » Wed Sep 02, 2015 4:18 pm

jrtexas wrote:Ok. Makes me understand better. As long as I sell and don't buy into a similar fund? Correct? But if I do so in my 457 or IRA, those are tax free? Correct. So I basically just take the loss and buy into something else?
You do want to replace what you sell with something similar so that you are not changing your asset allocation. But it cannot be "substantially identical". Unfortunately, substantially identical has not be completely defined so there is some grey area to tiptoe through.

You can only harvest losses in a taxable account - something that is not a 457 or IRA or 401k, etc.

This is fairly complicated and you don't have a good handle on it yet, so keep learning before you actually consider trying this. There are many ways to make a mistake and they can be very tedious to fix.

User avatar
House Blend
Posts: 4679
Joined: Fri May 04, 2007 1:02 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by House Blend » Wed Sep 02, 2015 4:52 pm

livesoft wrote:
nalor511 wrote:"You must sell them in a separate transaction at least one day before you sell the shares in your taxable account."

Where is the bolded portion, "one day before" coming from when selling shares in an IRA purchased within the last 30 days and you want to TLH from the same fund in your taxable account, e.g. why can't you run the IRA sale in the same day, but 'before' the taxable sale?
How do you make sure it is "before"? What records would prove that? Would your broker cooperate with the record keeping and reporting to the IRS or other authority? The record keeping that I have seen only goes down to the day and not the hour, minute, second. Yes, I know that the time of trade of an ETF or stock is available when it happens, but that time stamp is not shown on your 1099-B nor annual statement to my knowledge.

Because you own the shares still on the day you sell in your taxable account and that would create a wash sale.

Maybe when I have the opportunity, I will create wash sales in a Vanguard account via a related IRA. Then I can report what Vanguard tries to report. Of course, anybody else can jump right in and see if Vanguard is on the ball, too.
I agree about the granularity of time for the tax consequences of buying and selling: days are the smallest units.

But brokerages are only responsible for identifying wash sales that involve purchases and sales in the same account. And maybe not even then. If you sell VFINX and buy SPY, that's probably a wash sale, but I don't think it is Vanguard's responsibility to notice that. That's your problem.

If you buy VFINX in your Vanguard IRA and sell VFINX in your Vanguard taxable account, they *definitely* are not responsible for tagging this as a wash sale, and I will bet that they aren't about to touch that responsibility with a 10 foot pole.

And I will link to my previous post noting that there is no clear cut tax law that says you don't have a wash sale if you sell all shares of VFINX in your IRA before selling VFINX for a loss in taxable.
viewtopic.php?p=2609528#p2609528

People need to be aware that livesoft's rules are not tax law.
(Also, Publication 550 is not tax law.)

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Wed Sep 02, 2015 5:19 pm

Yep, what House Blend said.

You should consult your own tax advisor and/or legal counsel in these matters. LOL!
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Wed Sep 02, 2015 5:36 pm

JaySayms sent me this Kitces article, which I thought was excellent--and more (dare I say "substantially"?) conservative than the consensus opinion on bogleheads re: what would count as a wash sale. Does Tax Loss Harvesting “Almost” Substantially Identical Mutual Funds And ETFs Trigger A Wash Sale Problem?

[link fixed by admin LadyGeek]

User avatar
LadyGeek
Site Admin
Posts: 59603
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by LadyGeek » Wed Sep 02, 2015 8:23 pm

House Blend wrote:...People need to be aware that livesoft's rules are not tax law.
(Also, Publication 550 is not tax law.)
To new investors or those needing a refresh, House Blend is making an important point.

The wiki has been updated to show the official pecking order: Tax basics (Hierarchy of tax authority)

House Blend is correct - the IRS publications are not tax law. In fact, they're not listed at all and are provided "for guidance only."
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

TXAGBH
Posts: 41
Joined: Sun Oct 05, 2014 1:15 pm
Location: DFW

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by TXAGBH » Wed Sep 02, 2015 8:29 pm

I want to make sure I understand some of the finer nuances to TLH.

For examples, someone has:
Fund A (owned, no re-invested dividend or purchases)
Fund B (not currently owned)
Fund C (not currently owned)
Each fund is substantially different and no money or dividend have gone into any of the funds in the last 31 days.

Sell (exchange) all of Fund A and realize a loss of $1,000 and immediately purchase (exchange into) Fund B. Everything is good and you book your $1,000 loss.

10 days after buying Fund B, another RBD happens and now Fund B is showing a $1,000 loss.

My question is, 10 days after buying Fund B, can Fund B be sold and exchanged into Fund C, thus realizing an additional $1,000 loss?

So over a 10 day period, you've gone from Fund A to Fund B, and booked a $1,000 loss, and then from Fund B to Fund C and booked another 1,000 loss (a total realized loss of $2,000 from Fund A to Fund C)?

Is all of this correct?

And to come around full circle, someone would need to wait 31+ days after the exchange between Fund B to Fund C before buying back into Fund A, correct?

Now, would the same 31+ day prohibition (wash sale trigger) apply if you wanted to put brand new money into Fund C, for example 5 days after the Fund B to Fund C exchange?

User avatar
siamond
Posts: 5201
Joined: Mon May 28, 2012 5:50 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by siamond » Thu Sep 03, 2015 8:02 am

TXAGBH, as far as I understand, you're absolutely correct about the A=>B=>C sequence. Just be very careful to sell ALL shares from B.

And there is no problem buying more 'C' stock, since you didn't sell any of it in the past 31 days. There would be a potential problem if you were to buy more 'B' stocks though.

User avatar
packet
Posts: 834
Joined: Sun Nov 23, 2014 11:23 am
Location: The pub

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by packet » Thu Sep 03, 2015 8:28 am

TXAGBH wrote:I want to make sure I understand some of the finer nuances to TLH....
In the interest of understanding myself... I'll take a shot as this.
TXAGBH wrote:So over a 10 day period, you've gone from Fund A to Fund B, and booked a $1,000 loss, and then from Fund B to Fund C and booked another 1,000 loss (a total realized loss of $2,000 from Fund A to Fund C)? ...Is all of this correct?
Yes.
You now own Fund C, have a booked $2,000 in losses, and have not created a wash sale.
TXAGBH wrote:And to come around full circle, someone would need to wait 31+ days after the exchange between Fund B to Fund C before buying back into Fund A, correct?
(I'm iffy here)
Not correct.
I believe you would need to wait 31+ days after selling Fund A to repurchase Fund A. The Fund B to Fund C has no impact on the repurchasing of Fund A.
Likewise, you would need to wait 31+ days after selling Fund B before repurchasing it... and same for Fund C.

Make sense?

I would agree with siamond on purchasing more of Fund C... that'd be fine.

:beerCheers,
packet
First round’s on me.

User avatar
goingup
Posts: 3753
Joined: Tue Jan 26, 2010 1:02 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by goingup » Thu Sep 03, 2015 8:56 am

Roothy wrote:JaySayms sent me this Kitces article, which I thought was excellent--and more (dare I say "substantially"?) conservative than the consensus opinion on bogleheads re: what would count as a wash sale. Does Tax Loss Harvesting “Almost” Substantially Identical Mutual Funds And ETFs Trigger A Wash Sale Problem?

[link fixed by admin LadyGeek]
Thanks JaySayms and Roothy for that Kitces article. It really challenges my (limited) understanding of acceptable TLH partners.

From the article, "In other words, if you believe you’ve found a replacement investment that removes any danger of a material difference in performance during the wash sale period, you’ve probably just defined for yourself what constitutes a “substantially identical” security that would violate the wash sale rules!"

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Thu Sep 03, 2015 10:02 am

The Kitces article is nice, but offers no solutions or answers whatsoever. It does stir the pot which I'm all for, so that's why I like it, but it doesn't resolve anything. It makes worried people more worried and people who don't worry still won't worry after reading it.
Wiki This signature message sponsored by sscritic: Learn to fish.

EnjoyIt
Posts: 3391
Joined: Sun Dec 29, 2013 8:06 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by EnjoyIt » Thu Sep 03, 2015 10:28 am

The IRS is vague because the IRS has no clear cut and easy way to track some of these issues. People have been TLH for sometime with the IRS not meddling too much in the process. I think we can take that vagueness and use it to our advantage until the IRS decides to be less vague. Am I being too vague here?

User avatar
goingup
Posts: 3753
Joined: Tue Jan 26, 2010 1:02 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by goingup » Thu Sep 03, 2015 10:41 am

livesoft wrote:The Kitces article is nice, but offers no solutions or answers whatsoever. It does stir the pot which I'm all for, so that's why I like it, but it doesn't resolve anything. It makes worried people more worried and people who don't worry still won't worry after reading it.
I agree! Kitces does stir the pot without offering up answers. I think he notes that there is a lot of violating the spirit of the law going on, but until legislation addresses it the loophole will remain.

I wasn't worried about the commonly used International equity TLH partners before I read the article. Now I am less certain about their suitability. Guess I'll either proceed as planned or harvest losses and sit on the sidelines for 31 days. I'm in a holding pattern awaiting Vanguard to add SpecID to covered shares.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Thu Sep 03, 2015 11:01 am

goingup wrote:I think he notes that there is a lot of violating the spirit of the law going on, but until legislation addresses it the loophole will remain.
So after that 2008-05 Revenue ruling on IRAs affecting wash sales, did the IRS go back and check old tax returns or otherwise retroactively investigate or assess penalties for the IRA issue? I don't think the IRS did.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
House Blend
Posts: 4679
Joined: Fri May 04, 2007 1:02 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by House Blend » Thu Sep 03, 2015 11:21 am

I liked the Kitces article.

I do disagree with Kitces that correlation is or should be the ultimate purity test for deciding when mutual funds are "substantially identical".

Suppose a ruling is handed down which ends up drawing the line a bit more conservatively than expected, and ends up killing the business model of roboadvisors who TLH between ETFs that track (slightly) different indices. In case any of them are reading, I'll offer a free Plan B for them:

Take an index like the S&P 500. Partition the stocks into bins that you believe "explain" returns (market cap, sector, value/growth, etc). In other words, all stocks in a given bin have similar characteristics. Then create two ETFs with 250 stocks each by splitting each bin in half at random.

You should now have two S&P 500 clones with absolutely no overlap, and they should be very highly correlated to each other and to the S&P 500. Perfect TLH pairs.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Thu Sep 03, 2015 11:40 am

livesoft wrote:
goingup wrote:I think he notes that there is a lot of violating the spirit of the law going on, but until legislation addresses it the loophole will remain.
So after that 2008-05 Revenue ruling on IRAs affecting wash sales, did the IRS go back and check old tax returns or otherwise retroactively investigate or assess penalties for the IRA issue? I don't think the IRS did.
A Revenue Ruling is just the IRS *clarifying* the law as it sees it--it isn't changing the law. So, Orwell-like, post-Ruling, "IRAs have always triggered wash sales" (even when they didn't, because the Service wasn't enforcing it). That means that an auditor, with the Ruling as guidance, could apply it to returns that were filed before the Ruling. (If I'm wrong on this, someone please correct me.)

So no, we're not all getting free bites at the apple until the IRS definitively says, for instance, "401(k)'s also trigger wash sales, too" (or whatever.) If the Service does make such a ruling, and we've all been doing it wrong, then we would owe back taxes, interest, and *possibly* penalties. (We couldn't be criminally prosecuted, though! But we could going forward, if we ignored the Ruling.) Presumably that would only come up in an audit, though, which can go back 3-6 years (or more, if they think there is active fraud.)

The wash sales rule is a mess, for reasons Kitces describes pretty well. But everyone else is right that he proposes no solutions. That's because solutions aren't easy to come by--which is probably why the Service hasn't said much. And who knows if Congress will ever clarify the initial statute (from the 1920's!) which created the rule in the first place, in a very, very different financial environment.

In the meantime, we do the best we can with what we know. There are some on this Board who really resist simply giving somebody a list of "safe TLH partners" simply because there IS no such thing as "safe." (There's a thread creating such a comprehensive list right now.) I now agree with this resistance. You should know what you're doing, and take risks only as you are comfortable from a base of real research and understanding. Telling people how to mechanically perform TLHing is great, and describing the logic of it is also great. But I now think we should take out the part of the "Steps" guide that lists TLH fund partners. People should do that work themselves. If they don't know how to do it--they shouldn't be risking a TLH. (Can someone remove this from the TLH For Beginner's wiki?)

By the way, the Revenue Ruling on IRAs is here (Revenue Ruling 2008-5: http://www.irs.gov/pub/irs-drop/rr-08-05.pdf .
Last edited by Roothy on Thu Sep 03, 2015 11:50 am, edited 1 time in total.

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Thu Sep 03, 2015 11:44 am

House Blend wrote:
Take an index like the S&P 500. Partition the stocks into bins that you believe "explain" returns (market cap, sector, value/growth, etc). In other words, all stocks in a given bin have similar characteristics. Then create two ETFs with 250 stocks each by splitting each bin in half at random.

You should now have two S&P 500 clones with absolutely no overlap, and they should be very highly correlated to each other and to the S&P 500. Perfect TLH pairs.
But one of the messages of the Kitces article is that if they really are perfect substitutes, they for that reason might be considered, as a pair, "substantially identical" to what you sold. And it doesn't (necessarily) matter that they are two different funds. The IRS--nor the courts--has never stood on such ceremony. Indeed, this is probably why the term "substantially identical" is vague--it allows the Service to capture cases exactly like what you describe.

There are plenty of examples like this in tax law, where the courts refused to take a formalistic approach, and instead looked at the substance of an entire transaction, rather than considering it piece-by-piece. (I wish I could think of one offhand. Maybe any tax lawyers reading this could chime in. Tax shelters from the 1970's always involving, for some reason, physicians is ringing a bell for me...)

User avatar
House Blend
Posts: 4679
Joined: Fri May 04, 2007 1:02 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by House Blend » Thu Sep 03, 2015 12:59 pm

^Shrug. There's lots of hypothetical possibilities one can worry about.

Until the IRS provides more guidance, or Congress rewrites the wash sale law, I can agree with Kitces that if your two funds have low correlation, that's an argument your tax lawyer should make in your defense that it is not a wash.

But it's not the only possible argument. I also claim that if you trade an ETF of 250 stocks for an ETF of 250 completely different stocks, your tax lawyer should use the complete lack of overlap in your defense.

FWIW, I think what you are trying to recall is the "step doctrine".
https://en.wikipedia.org/wiki/Step_transaction_doctrine

Topic Author
Roothy
Posts: 136
Joined: Wed Aug 26, 2015 9:20 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by Roothy » Thu Sep 03, 2015 1:19 pm

House Blend wrote:
FWIW, I think what you are trying to recall is the "step doctrine".
https://en.wikipedia.org/wiki/Step_transaction_doctrine
Thank you, yes, that's it! And it's a doctrine that seems to ignored in some TLH conversations. From that wiki: "The 'intent' or 'end result' test combines a series of closely related events that do not have independent purposes. If the intent of a step was merely to serve the next step, the court may consider the steps together."

nalor511
Posts: 527
Joined: Mon Jul 27, 2015 1:00 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by nalor511 » Fri Sep 04, 2015 8:11 pm

livesoft wrote:
nalor511 wrote:"You must sell them in a separate transaction at least one day before you sell the shares in your taxable account."

Where is the bolded portion, "one day before" coming from when selling shares in an IRA purchased within the last 30 days and you want to TLH from the same fund in your taxable account, e.g. why can't you run the IRA sale in the same day, but 'before' the taxable sale?
How do you make sure it is "before"? What records would prove that? Would your broker cooperate with the record keeping and reporting to the IRS or other authority? The record keeping that I have seen only goes down to the day and not the hour, minute, second. Yes, I know that the time of trade of an ETF or stock is available when it happens, but that time stamp is not shown on your 1099-B nor annual statement to my knowledge.

Because you own the shares still on the day you sell in your taxable account and that would create a wash sale.

Maybe when I have the opportunity, I will create wash sales in a Vanguard account via a related IRA. Then I can report what Vanguard tries to report. Of course, anybody else can jump right in and see if Vanguard is on the ball, too.
Well, you do get an email confirmation from Vanguard regarding when you submitted the request, for each transaction. That would show that the IRA sale was submitted before the taxable sale. Assuming they process transactions FIFO, that may constitute enough evidence?

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Fri Sep 04, 2015 8:15 pm

nalor511 wrote:Well, you do get an email confirmation from Vanguard regarding when you submitted the request, for each transaction. That would show that the IRA sale was submitted before the taxable sale. Assuming they process transactions FIFO, that may constitute enough evidence?
True, but that is just another record to keep somehow and to find somehow if needed and to show that you didn't alter the time stamp somehow, etc.
Wiki This signature message sponsored by sscritic: Learn to fish.

nalor511
Posts: 527
Joined: Mon Jul 27, 2015 1:00 am

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by nalor511 » Fri Sep 04, 2015 8:25 pm

livesoft wrote:
nalor511 wrote:Well, you do get an email confirmation from Vanguard regarding when you submitted the request, for each transaction. That would show that the IRA sale was submitted before the taxable sale. Assuming they process transactions FIFO, that may constitute enough evidence?
True, but that is just another record to keep somehow and to find somehow if needed and to show that you didn't alter the time stamp somehow, etc.
Also true, but email search is pretty good these days, and/or if you knew you were doing a TLH involving same fund being sold in an IRA you could print out the email and put it with your tax stuff in case you needed it. Also, Vanguard presumably wouldn't send anything to the IRS regarding a potential wash sale in an IRA, because they don't send 1099's for asset exchanges inside IRAs. At least, I've never gotten one. But then I've never had a potential wash sale.

User avatar
ebotrd
Posts: 183
Joined: Thu Jul 28, 2011 12:55 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by ebotrd » Sat Sep 05, 2015 11:48 am

Hi, everyone,

I'm about to do my first TLH move, and have read all this but can you help me out with a few specific questions?

I've never TLH before, but it looks like now (by Monday) would be a good time to do it with my VTIAX. I just sent in the form to switch to SpecID, but I guess they continue to list everything as AvgCost prior to that. It looks like that's fine because I started the VTIAX account 5/2012 and they average $26.07 per share so every single auto-investment transaction shows a loss (basically every 2 weeks with some larger purchases mixed in). I guess that's because 9/4/15 it ended lower at $23.93/share.

So, I show short-term losses at about $12,000, and long-term at about $4,000. I was thinking I'd just TLH the whole $16,000 by "Exchanging" the whole shebang (CORRECTION: Total cost: $224,842.44; Market value as of 9/4/15: $206,437.65) into $206k of VFWAX. Just to get it over with. So I'd be taking full advantage of TLH income tax deduction benefits for the next 5 years, even if I didn't TLH any more until 2020. Am I missing anything? Any pitfalls with that?

I did turn off the auto-investments and redirected capital gains and dividends to just purchase more VTSAX.

My only other concern is I have some old VXUS still sitting in there, which I guess is considered "substantially identical" to VTIAX. It's still set at FIFO, but I can change it -- even as FIFO it shows continual losses since 12/2012. I haven't bought any more VXUS since deciding to switch over to VTIAX mid-2012, but it shows a few $100's of reinvested capital gains & dividends since. So, I assume as long as I turn the reinvesting off and I'm not buying any more VXUS, even if I TLH from VTIAX to VFWAX, there's no problem with wash sale issues - is that correct?

I do love the idea of minimizing the number of funds to keep it simple, but not if it's going to cost me.

I also have about 5 other Vanguard ETF holdings as well that I'd love to soft of consolidate into Admiral shares, but they mostly have gains and since they cover the same general categories I figure I should just leave them there. I guess I could trim off their short-term losses with this current TLH effort to be real thorough about it, but I assume I should just keep transactions that show gains.

STOCK NAMES FOR REFERENCE:
VTIAX: Vanguard Total International Stock Index Fund Admiral Shares.
VFWAX: Vanguard FTSE All-World ex-US Index Fund Admiral Shares.
VXUS: VANGUARD TOTAL INTL STOCK INDEX FUND ETF.
When something is important enough, you do it even if the odds are not in your favor. -- E. Musk.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 11:56 am

Ooops, edit in progress. I misread 5/2012 as 12/05/2012.

What was the value of your VTIAX at the beginning of December 2012? The shares purchased before then probably have little to no losses and maybe some decent gains which would reduce the value of your tax-loss harvesting. For simplicity, you could sell everything, but you would not have to if you could chose only to sell the shares that actually have losses. I suspect you would choose simplicity though.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
ebotrd
Posts: 183
Joined: Thu Jul 28, 2011 12:55 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by ebotrd » Sat Sep 05, 2015 12:46 pm

I guess if I switched cost basis to SpecID I could tease that out and just exchange out of the loser transactions and keep the winners but is there any advantage?

I'm clueless - I guess there's the benefit of slightly better approximation to my overall diversification goal (VTIAX slightly better than VFWAX). Anything else?
When something is important enough, you do it even if the odds are not in your favor. -- E. Musk.

User avatar
ebotrd
Posts: 183
Joined: Thu Jul 28, 2011 12:55 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by ebotrd » Sat Sep 05, 2015 12:50 pm

Oh livesoft, I guess when you wrote:
What was the value of your VTIAX at the beginning of December 2012?
... you meant the VXUS I was talking about there (Not VTIAX)(?)
When something is important enough, you do it even if the odds are not in your favor. -- E. Musk.

slimboogie
Posts: 17
Joined: Mon May 12, 2014 7:59 pm
Location: Alexandria, VA

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by slimboogie » Sat Sep 05, 2015 12:53 pm

prototype wrote:
Roothy wrote:

Step 3:
Beware if you have other accounts with substantially identical Funds, as these might trigger wash sales. If there are "substantially identical" funds in either your *or your spouse's* other *taxable* accounts, you will definitely risk triggering wash sales. Any substantially identical Funds in you or your spouse's *IRAs* (Roth or traditional) will also risk triggering wash sales. However, substantially identical Funds held in employer-controlled tax advantaged accounts (like 401(k)s, 403(b)s, or 457(b)s) probably will *not*. Probably. There has been no explicit guidance on this issue from the IRS and there are differences of opinion on bogleheads. Many bogleheads go ahead and TLH without worrying about the risk of triggering wash sales from whatever they holding in their employer-sponsored tax-advantaged accounts. But if you want to be super safe, make sure that any Funds in your other accounts (*all* of them) are not substantially identical to those in your taxable accounts that you are about to TLH; then you will ensure no conflicts (but you will also be adding some complication and work). Another safe move is to discontinue automatic investments into these tax-advantaged accounts for 30 days before and 31 days after the TLH--but for obvious reasons, for most people this is not a reasonable solution.
Wow, I'm glad I read Roothy's OP, especially step 3 so I just quoted that part of the post.

I'm a newbie to this whole TLH process and was getting ready to do a full Exchange of my VTIAX to VFWAX in my Vanguard After-Tax Account to get a ~$4K TLH. I would have never thought about that fact that I also have VTIAX in my Vanguard Pre-Tax IRA with all the distributions getting reinvested in VTIAX. All distributions from my After-Tax Account have always gone to my bank vs. being re-invested.

Anyway I just called Vanguard and talked to someone (my assigned Vanguard FA person was not available). They said yes I should change the distributions from my VTIAX Fund in my Pre-Tax tIRA from Reinvest to buying a different fund, which I just did (VBTLX for now). I hope that takes effect before late Sept. distro's.

So I think I'm OK to execute the exchange now since the last VTIAX distro's (in my case, share purchases in my tIRA and deposits to my bank for my after tax account) where in late July.

Why does everything have to be so complicated? :confused

Thanks to everyone who has posted here and on other threads on the finer points of Tax Loss Harvesting and avoiding wash sales.
First of all, thanks to all for the discussion about TLH.

I did my first TLH yesterday from VTIAX to VFWAX in my taxable account. I have a roth IRA that only holds VTIAX with a dividend due at the end of September (it is setup for automatic reinvestment). Should I contact Vanguard also to setup another fund within the roth ira to send the dividends. If so, what would a good recommendation. VBTLX? VFWAX? maybe VTSAX. My concern is that my dividend amount will not meet the minimum fund requirement for admiral shares or regular shares. Would I need to exchange some of VTIAX now to get to the minimum. Thanks!

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 12:59 pm

slimboogie wrote:I did my first TLH yesterday from VTIAX to VFWAX in my taxable account. I have a roth IRA that only holds VTIAX with a dividend due at the end of September (it is setup for automatic reinvestment). Should I contact Vanguard also to setup another fund within the roth ira to send the dividends. If so, what would a good recommendation. VBTLX? VFWAX? maybe VTSAX. My concern is that my dividend amount will not meet the minimum fund requirement for admiral shares or regular shares. Would I need to exchange some of VTIAX now to get to the minimum. Thanks!
I think you should have the dividends from VTIAX in your Roth IRA go to another fund. Either VBTLX or VFWAX would be fine, but you would have to own the fund first. If you don't already own the fund, then you will have to buy some shares of the fund. Unless you make a Roth contribution, then you would have to exchange from a fund already in your Roth IRA to get the new fund going.

As for VBTLX or VFWAX, choose based on your asset allocation plan. Certainly, at this time, one should probably be buying equities and not bonds in order to keep asset allocation as desired (that is, unless one bought lots of equities in a rebalancing move on August 24-25).
Wiki This signature message sponsored by sscritic: Learn to fish.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 1:00 pm

ebotrd wrote:Oh livesoft, I guess when you wrote:
What was the value of your VTIAX at the beginning of December 2012?
... you meant the VXUS I was talking about there (Not VTIAX)(?)
I think you got the gist of what I was writing: No reason to sell shares with gains unless you want simplicity.
Wiki This signature message sponsored by sscritic: Learn to fish.

slimboogie
Posts: 17
Joined: Mon May 12, 2014 7:59 pm
Location: Alexandria, VA

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by slimboogie » Sat Sep 05, 2015 1:08 pm

livesoft wrote:
slimboogie wrote:I did my first TLH yesterday from VTIAX to VFWAX in my taxable account. I have a roth IRA that only holds VTIAX with a dividend due at the end of September (it is setup for automatic reinvestment). Should I contact Vanguard also to setup another fund within the roth ira to send the dividends. If so, what would a good recommendation. VBTLX? VFWAX? maybe VTSAX. My concern is that my dividend amount will not meet the minimum fund requirement for admiral shares or regular shares. Would I need to exchange some of VTIAX now to get to the minimum. Thanks!
I think you should have the dividends from VTIAX in your Roth IRA go to another fund. Either VBTLX or VFWAX would be fine, but you would have to own the fund first. If you don't already own the fund, then you will have to buy some shares of the fund. Unless you make a Roth contribution, then you would have to exchange from a fund already in your Roth IRA to get the new fund going.

As for VBTLX or VFWAX, choose based on your asset allocation plan. Certainly, at this time, one should probably be buying equities and not bonds in order to keep asset allocation as desired (that is, unless one bought lots of equities in a rebalancing move on August 24-25).
livesoft,
Thanks for the quick feedback. Most of my account is with TSP so I will need to break out my excel spreadsheet to see what I need...

Another quick separate note.... from everything that I have read so far and understand - I had a couple of Navy federal cd's mature this past week... I should be able to purchase additional VFWAX next week with no consequences (i can continue to buy the alternate fund, not my original)?

User avatar
ebotrd
Posts: 183
Joined: Thu Jul 28, 2011 12:55 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by ebotrd » Sat Sep 05, 2015 1:10 pm

I'm a newbie too but let me take a stab at slimboogie's question...
You could reinvest dividends & capital gains wherever...even just simple money market fund. Renember you only have to do it for 30 days. Then you go back to automatically reinvest In VTIAX if you want. Sounds like a lot of these veteran TLH's always funnel div/cap gains to money market anyway just to keep TLH simpler. (You can go in and route that $$ into any of your funds you choose whenever you feel like it).

If you already have another Admiral fund you can buy more shares of even tiny amounts. It's just when u first open it that they have the $10k minimum.

Also it sounds like a relatively small "error" to just leave the div/cap gains reinvesting -- it's not like the IRS arrests you (or worse, audits you!). You'd just have to subtract out that portion of your TLH move come tax time. Since it's only 30 days of reinvesting it's likely less than $100 that you couldn't claim as deductible.

Does that sound right everyone?
Last edited by ebotrd on Sat Sep 05, 2015 1:27 pm, edited 3 times in total.
When something is important enough, you do it even if the odds are not in your favor. -- E. Musk.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 1:10 pm

slimboogie wrote:Another quick separate note.... from everything that I have read so far and understand - I had a couple of Navy federal cd's mature this past week... I should be able to purchase additional VFWAX next week with no consequences (i can continue to buy the alternate fund, not my original)?
Yes, do not buy the fund you just sold (at least for a little while). Yes, you can buy shares in the new fund you used to replace shares of the old fund that were sold at a loss.
Wiki This signature message sponsored by sscritic: Learn to fish.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 1:13 pm

ebotrd wrote:Also it sounds like a relatively small "error" to just leave the div/cap gains reinvesting -- it's not like the IRS arrests you (or worse, audits you!). You'd just have to subtract out that portion of your TLH move come tax time. Since it's only 30 days of reinvesting it's like be less than $100 that you couldn't claim as deductible.

Does that sound right everyone?
Yes, but there is the detail of adding the disallowed loss to the basis of the shares causing the wash sale and giving those shares a different "acquired date". Eventually, one should be able to account for the loss when these subsequent shares are sold. It is extra bookkeeping that I have learned that some folks do not like.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
ebotrd
Posts: 183
Joined: Thu Jul 28, 2011 12:55 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by ebotrd » Sat Sep 05, 2015 1:35 pm

livesoft wrote:
ebotrd wrote:Oh livesoft, I guess when you wrote:
What was the value of your VTIAX at the beginning of December 2012?
... you meant the VXUS I was talking about there (Not VTIAX)(?)
I think you got the gist of what I was writing: No reason to sell shares with gains unless you want simplicity.
Thanks, livesoft.
I would like the simplicity of getting the VXUS out of there completely but I guess if I have to pay 15% LTCG to do it that would be a waste -- I might as well just leave it alone and consider it as a part of my VTIAX.

So you say just go for it with this $206k VTIAX to VFWAX exchange?
When something is important enough, you do it even if the odds are not in your favor. -- E. Musk.

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: TLH for absolute dummies [Tax Loss Harvesting]

Post by livesoft » Sat Sep 05, 2015 1:41 pm

ebotrd wrote:So you say just go for it with this $206k VTIAX to VFWAX exchange?
That's a decision you have to make for yourself.
Wiki This signature message sponsored by sscritic: Learn to fish.

Post Reply