Tax Loss Harvesting Question

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DrFIRE
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Tax Loss Harvesting Question

Post by DrFIRE » Wed Sep 12, 2018 6:16 pm

with regards to tax loss harvesting, I recently read a blog post that referenced a maximum 70% overlap between funds to not trigger the wash sale rule. http://www.mymoneyblog.com/etf-tax-loss ... tical.html. people often mention tax loss harvesting partners in the forums such as VXUS and VEU- however those are cited as having 76% overlap. thoughts? also the etf comparison tool cited in the blog no longer works- does anybody know of a reliable etf comparison tool?

Nate79
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Re: Tax Loss Harvesting Question

Post by Nate79 » Wed Sep 12, 2018 7:15 pm

Garbage article. Pure fantasy not based in reality.

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Cycle
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Re: Tax Loss Harvesting Question

Post by Cycle » Wed Sep 12, 2018 7:19 pm

Is it fair to say VFWAX is different enough from VTIAX to not trigger a wash sale?

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Duckie
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Re: Tax Loss Harvesting Question

Post by Duckie » Wed Sep 12, 2018 7:25 pm

Cycle wrote:Is it fair to say VFWAX is different enough from VTIAX to not trigger a wash sale?
Yes. VFWAX doesn't have small caps. That's enough of a difference.

DrFIRE
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Re: Tax Loss Harvesting Question

Post by DrFIRE » Wed Sep 12, 2018 7:30 pm

Im glad to hear that criteria may be garbage. has there been any specific publications on what the IRS determines to be substantially identical?

also the IRS had specifically listed IRAs and Roth IRAs as possibly triggering the wash sale rules with taxable accounts, but how about employer sponsored 401ks and 403bs?
(https://www.irs.gov/pub/irs-drop/rr-08-05.pdf)

Nate79
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Re: Tax Loss Harvesting Question

Post by Nate79 » Wed Sep 12, 2018 8:06 pm

DrFIRE wrote:
Wed Sep 12, 2018 7:30 pm
Im glad to hear that criteria may be garbage. has there been any specific publications on what the IRS determines to be substantially identical?

also the IRS had specifically listed IRAs and Roth IRAs as possibly triggering the wash sale rules with taxable accounts, but how about employer sponsored 401ks and 403bs?
(https://www.irs.gov/pub/irs-drop/rr-08-05.pdf)
The IRS at one point gave guidance that no two mutual funds could be substantially identical. How could they have said that if what the article said was true?

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Earl Lemongrab
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Re: Tax Loss Harvesting Question

Post by Earl Lemongrab » Thu Sep 13, 2018 12:47 pm

Review this lengthy thread.

viewtopic.php?f=1&t=245625

While some support the "overlap" theory, almost no one has expressed a low number like 70%. My opinion is that even the same index is not substantially identical for funds from different companies. I demonstrated that belief by swapping VOO for IVV (both S$O 500 ETFs) in a TLH move.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

DrFIRE
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Re: Tax Loss Harvesting Question

Post by DrFIRE » Thu Sep 13, 2018 7:46 pm

Thanks, thats very helpful!

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