Page 1 of 1

Thank you !! and TLH question [Tax Loss Harvesting]

Posted: Wed Dec 26, 2018 12:00 pm
by mgk2010
Hi

I have been a very long time visitor from this forum and have benefited a lot !

I am in my mid-40s. In 2000, I panicked. 2008 I had an investment account with an advisory firm, and my advisor advised to stay the course. I came across this site in 2010-11, and realized, that while my advisor had induced a discipline in my investing, my taxable account also had 20+ funds (incl MLPs), and the fees would have eaten bulk of my gains in the long term. I read up on Bogle’s and other books and this forum gradually switched over to indexing my portfolio. About the current slowdown/correction (or whatever it is) - I am in the camp of staying the course. Thank you so much to the long timers who have contributed so much of their experience.

One thing I have never done is TLH. I wanted some help to make sure I do not break the wash sale rule. I have a taxable account in VG have incurred about 2k loss this year in VTSAX and VTIAX. I was thinking of TLH specific lots into VLCAX and VFWAX respectively. In both of these funds I have disabled auto-reinvesting of dividends. I understand the TLH rules apply across all investment accounts, and as long as there is no new purchase or sale within +/- 30d of funds that are similar (or follow the same index), I should be ok.

Here is my situation.

My 401k, & Åfter Tax 401k

Black rock US eq market index (custom fund for my employer), follows DJ US Total Stk Mkt
401k account does not show distributions

FTIHX, follows MSCI ACWI (All Country World Index) ex USA
Dividend reinvestment 12/14

My Roth IRA
FSKAX, follows Dow Jones U.S. Total Stock Market Index
Dividend reinvestment 12/14

My HSA
VIGIX, follows CRSP US Large Cap Growth Index
Recent purchase 12/14

My Wife’s 401k
VTTHX,Target2035
Distribution information not available. No recent purchase

My Wife’s Roth IRA
FSKAX, follows Dow Jones U.S. Total Stock Market Index
Dividend re-investment 12/14

Will I break TLH wash sale rules, if I TLH as above? Is there anything else I should be concerned about?

Re: Thank you !! and TLH question [Tax Loss Harvesting]

Posted: Wed Dec 26, 2018 1:36 pm
by PhysicianOnFIRE
As long as the potentially offending dividend reinvestments are in funds that mirror different indices than VTSAX and VTIAX, and it appears that they are, most here would agree that you should be OK. The IRS has not formally defined "substantially identical."

There are varying opinions on whether or not a purchase in a 401(k) or HSA could trigger a wash sale. It's a gray area.

It appears you should be able to make these transactions. I might use VFIAX (S&P 500) rather than VLCAX for the lower expense ratio and similar performance, but that's up to you.

:beer
-PoF

Re: Thank you !! and TLH question [Tax Loss Harvesting]

Posted: Wed Dec 26, 2018 2:23 pm
by mgk2010
Thank you !