TLH, wash sale and Fidelity 403b

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student
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Joined: Fri Apr 03, 2015 6:58 am

TLH, wash sale and Fidelity 403b

Post by student » Mon Oct 22, 2018 7:23 pm

I have read a number of threads regarding wash sale and 401k/403b. I see arguments on both sides as to whether wash sale applies to 401k/403b when one does a TLH in a taxable account. One argument on the no side that I have heard is that one may not have complete control in a 401k/403b account. I have experienced this in my Fidelity 403b account. In preparation of TLH, I want to divert dividend earned in the total market fund to a different fund. I could not figure out how to do it online. I called them today and I was told that this cannot be done. Just giving a data point.

rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: TLH, wash sale and Fidelity 403b

Post by rkhusky » Mon Oct 22, 2018 8:58 pm

If the two total market funds don't follow the same index, you might not have to worry about a wash sale.

You could always temporarily sell the total market fund in your 403b and buy it back after it pays the dividend.

You could disregard the small wash that would be caused by the dividend purchase and chalk it up to a TLH expense.

You could wait to do the TLH until 30 days have past since the dividend purchase and before 30 days until the next dividend.

You could choose not to TLH.

student
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Re: TLH, wash sale and Fidelity 403b

Post by student » Mon Oct 22, 2018 9:51 pm

rkhusky wrote:
Mon Oct 22, 2018 8:58 pm
If the two total market funds don't follow the same index, you might not have to worry about a wash sale.

You could always temporarily sell the total market fund in your 403b and buy it back after it pays the dividend.

You could disregard the small wash that would be caused by the dividend purchase and chalk it up to a TLH expense.

You could wait to do the TLH until 30 days have past since the dividend purchase and before 30 days until the next dividend.

You could choose not to TLH.
Thanks for the suggestions.

They follow different indices. I guess I just want to be doubly safe. I will most likely do TLH if the opportunity is here.

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Earl Lemongrab
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Re: TLH, wash sale and Fidelity 403b

Post by Earl Lemongrab » Wed Oct 24, 2018 2:13 pm

I'm not in favor of making regulations for the IRS. The current regulations do not mention 403(b) plans in wash sales.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

retiredjg
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Re: TLH, wash sale and Fidelity 403b

Post by retiredjg » Wed Oct 24, 2018 3:43 pm

There has never been an indication that 403b accounts are included in the wash sale arena. I'd risk it, especially since two different indices are involved. But you have to do what you are comfortable with.

How hard would it be to use a different fund?

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