WellsTrade and Vanguard Mutual Funds - Maybe exit

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chrissyp
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WellsTrade and Vanguard Mutual Funds - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 9:59 am

Alright so I have about 88,000 in munis at Wellstrade in VTSAX. About 50,000 was bought in 2016 and the rest have been DAC on down days for the past 10 months. I am 32.

I have about 40 tax lots however none have capital losses. I just realized last week that there is no tax lot selection through WellsTrade so I have to call to broker a trade. This is apparently free. There is also no way to convert to $VTI at WellsTrade as an in-place exchange.

I have still about 30,000 in cash that I am looking to rebalance and entry into after tax funds. Some of this will be into $VXUS as I have about 20,000 in my IRA and I am looking to move some of that international into taxable as I buy more bonds/small cap value into my IRA - rebalance.

So my fear or question or line of thought is this. I fall into the 25 percent tax bracket and with the new brackets if they are passed I will barely be above the 90,000 threshold. (140,000 combined -18,000 401k max, HSA family max, FSA daycare wife 401k about 10,000).

My question is this for tax loss harvesting:

1. I could sell the funds at WellsTrade. I do not need the money and about 55,000 does qualify for long term capital gains which I would have to pay. Then I could move this to Vanguard which I guess has better allotment of options with their funds (selling tax lots online).

2. I could start buying ETFs in taxable but with the new tax plan FIFO rules may not matter for tax loss harvesting unless the market crashes.

3. Do nothing and just do everything by phone and still take advantage of tax loss harvesting if it even will exist on my account. Which it may not for some time.

4. See if Vanguard will allow me to transfer the mutual funds in kind to their brokerage.
Last edited by chrissyp on Wed Dec 06, 2017 1:53 pm, edited 1 time in total.

bloom2708
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by bloom2708 » Wed Dec 06, 2017 10:24 am

4. Transfer to Vanguard. I don't know what type of fees you are paying with Wellstrade. If you want Vanguard funds, open a taxable account there. No fees, not pressure to buy other junk.

Buying the mutual fund version (VTSAX Total US Admiral) is identical to the ETF version (VTI Total US).

There are several current threads on the differences between mutual funds and ETFs. In general, go with the mutual fund version for buy and hold investing.

Consider adding Total International as part of your mix. 20% to 40%. It adds good diversification to your Total US basket of stocks.

Do you have bonds in your 401k or Roth 10-20% bonds at any age is a good stabilizer.
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livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 10:31 am

chrissyp wrote:
Wed Dec 06, 2017 9:59 am
Alright so I have about 88,000 in munis at Wellstrade in VTSAX. About 50,000 was bought in 2016 and the rest have been DAC on down days for the past 10 months. I am 32.

I have about 40 tax lots however none have capital losses. I just realized last week that there is no tax lot selection through WellsTrade so I have to call to broker a trade. This is apparently free. There is also no way to convert to $VTI at WellsTrade as an in-place exchange.
...
I stopped reading because I couldn't get past some confusion.

1. VTSAX is not "munis", so what are you writing about?

2. There is quite easy tax lot selection through WellsTrade (online without a phone call) and it is better than Vanguard's mechanism, so what are you writing about? Maybe you mean for mutual funds?
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 10:48 am

livesoft wrote:
Wed Dec 06, 2017 10:31 am
chrissyp wrote:
Wed Dec 06, 2017 9:59 am
Alright so I have about 88,000 in munis at Wellstrade in VTSAX. About 50,000 was bought in 2016 and the rest have been DAC on down days for the past 10 months. I am 32.

I have about 40 tax lots however none have capital losses. I just realized last week that there is no tax lot selection through WellsTrade so I have to call to broker a trade. This is apparently free. There is also no way to convert to $VTI at WellsTrade as an in-place exchange.
...
I stopped reading because I couldn't get past some confusion.

1. VTSAX is not "munis", so what are you writing about?

2. There is quite easy tax lot selection through WellsTrade (online without a phone call) and it is better than Vanguard's mechanism, so what are you writing about? Maybe you mean for mutual funds?
Sorry I meant Mutual Fund not muni bond. And the tax lot selection does not exist with mutual funds. It becomes a massive pain in the ass if I ever have to do capital losses etc but I am not sure I will ever have to do that.

I pay zero fees with WellsTrade. I am grandfathered into PMA.

livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 10:52 am

For the VTSAX then I would transfer-in-kind to Vanguard which should cost you nothing. Of course Vanguard will allow you to do that.

I have transferred out of WellsTrade in-kind to other brokers for the cash rewards without problem nor costs. Once at Vanguard, you could do Specific Identification and carry on. Or you could convert to ETF share class once at Vanguard, then transfer in-kind back to WellsTrade (or not) if desired.
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 10:54 am

livesoft wrote:
Wed Dec 06, 2017 10:52 am
For the VTSAX then I would transfer-in-kind to Vanguard which should cost you nothing. Of course Vanguard will allow you to do that.

I have transferred out of WellsTrade in-kind to other brokers for the cash rewards without problem nor costs. Once at Vanguard, you could do Specific Identification and carry on. Or you could convert to ETF share class once at Vanguard, then transfer in-kind back to WellsTrade (or not) if desired.
What was the process you did with this to avoid the transfer fee?

livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 10:55 am

What transfer fee?
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 11:07 am

livesoft wrote:
Wed Dec 06, 2017 10:55 am
What transfer fee?
WellsTrade charges 95 dollars for outgoing wires from Brokerage accounts.

Also I just called Vanguard and I guess you can not exchange VTSAX shares for VTI which is shocking to me. I had 3 people double check but they claim since the securities are different. Maybe only VTSMX is eligible?

Chuck
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by Chuck » Wed Dec 06, 2017 11:11 am

chrissyp wrote:
Wed Dec 06, 2017 11:07 am
WellsTrade charges 95 dollars for outgoing wires from Brokerage accounts.
You can only "wire" cash, which would assume selling the fund first.

To move the fund in-kind, you want to do a ACAT, which might also incur a fee.

livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 11:20 am

It's been so long since I did a transfer, so maybe fees have changed. I am also grandfathered into free trades.

I do know that I did not pay an account closure fee last year for a traditional IRA that had no balance after a Roth conversion.
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 11:29 am

livesoft wrote:
Wed Dec 06, 2017 11:20 am
It's been so long since I did a transfer, so maybe fees have changed. I am also grandfathered into free trades.

I do know that I did not pay an account closure fee last year for a traditional IRA that had no balance after a Roth conversion.
Same I had 3 accounts grandfathered at WellsFargo. A Traditional IRA, a Roth IRA and a brokerage account. I closed the Traditional IRA about a year with a zero balance and without a fee.

I would like to keep the Roth IRA at WellsTrade but only transfer the After Tax certain funds in kind. Did you do that without fees at WellsTrade? It didn't prompt ACAT did it? I still would like to keep the Free Trades and brokerage account open at Wells Fargo.

livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 11:36 am

Transfer in-kind means ACAT.
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 11:38 am

livesoft wrote:
Wed Dec 06, 2017 11:36 am
Transfer in-kind means ACAT.
You sure you have to transfer the entire account?

EDIT: Or basically what I am asking since you have done this. Have you transferred assets from Wells Trade in-kind with it closing your account and/or losing your free trades?

Chuck
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by Chuck » Wed Dec 06, 2017 12:13 pm

You can specify which securities to transfer using ACAT.

chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 12:19 pm

Chuck wrote:
Wed Dec 06, 2017 12:13 pm
You can specify which securities to transfer using ACAT.
Sure but I wan't to make sure it won't close the account at the original institution.

livesoft
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by livesoft » Wed Dec 06, 2017 12:20 pm

chrissyp wrote:
Wed Dec 06, 2017 11:38 am
EDIT: Or basically what I am asking since you have done this. Have you transferred assets from Wells Trade in-kind with it closing your account and/or losing your free trades?
I did not transfer ALL my securities. I still have a major portion of my assets at WellsTrade in ETFs. I did not close my account.

I have found customer service on the phone outstanding. What do they tell you when you call them up?

BTW, my tIRA sat empty for quite some time. They sent a letter saying it would fall out of the PMA free-trade thing if I did not do something with it. I called them up and said, "Don't touch it for now and keep it with the free-trade deal. I might have to recharacterize back into it." They said, "OK, but next quarter you will automatically get the same letter."
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chrissyp
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 12:30 pm

livesoft wrote:
Wed Dec 06, 2017 12:20 pm
chrissyp wrote:
Wed Dec 06, 2017 11:38 am
EDIT: Or basically what I am asking since you have done this. Have you transferred assets from Wells Trade in-kind with it closing your account and/or losing your free trades?
I did not transfer ALL my securities. I still have a major portion of my assets at WellsTrade in ETFs. I did not close my account.

I have found customer service on the phone outstanding. What do they tell you when you call them up?

BTW, my tIRA sat empty for quite some time. They sent a letter saying it would fall out of the PMA free-trade thing if I did not do something with it. I called them up and said, "Don't touch it for now and keep it with the free-trade deal. I might have to recharacterize back into it." They said, "OK, but next quarter you will automatically get the same letter."
I haven't called Wells yet. I called them yesterday about the Exchange of VTSAX to VTI wondering if they could do it since Vanguard has that function. They said no, I would have to sell and re-buy. Again this was a hypothetical based around the fact that I then asked well what do I do with the tax lots. To which Wells was sure that I could do the same tax lot selection with mutual funds. 5 minutes later they said I would have to do it all by phone.

I have read on this forum where others essentially sell some mutual funds and then email Wells Fargo and say "specID these lots". Not sure if this really works?

Ideally if there is a period where the market declines say for a month I want to be able to sell a portion of the holdings at a loss turn off DRIPs and buy another fund. It would be nice if I can do this online but alas.

Another thing I can do is start to buy VTI which honestly might be a non factor if tax reform passes and I have to always do FIFO with stocks/ETFs. Vanguard is telling me they can never exchange VTSAX for VTI without a taxable sale.

I am not opposed to paying taxes at 15 percent but my goal is to retire early and to use the capital gains if possible to live on at zero percent.

livesoft
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Re: WellsTrade and Vanguard Mutual funds - Maybe exit

Post by livesoft » Wed Dec 06, 2017 12:32 pm

If you can sell specific shares "versus-purchase" online by a secure message or by phone at no additional cost (i.e. it is still free), then I don't see what the problem would be except for your anxiety. You seem to be fine asking questions on this forum which is exactly how the secure message setup works at WellsTrade, right?

Vanguard is probably not telling the truth about a VTSAX to VTI conversion. If you call again, you can ask them to read their web site back to you: https://investor.vanguard.com/etf/faqs

PS: Maybe edit your thread title to change munis to mutual funds please?
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Tyler Aspect
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Re: WellsTrade and Vanguard Munis - Maybe exit

Post by Tyler Aspect » Wed Dec 06, 2017 1:00 pm

I do not see a need to sell your Total Stock Index Fund at all. Just leave it where it is. Since you do not have any losses all this discussion is hypothetical.

But do turn off dividend and capital gains reinvestment. I hate these small lots. I usually purchase funds in multiples of a thousand dollars to avoid small lots.
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chrissyp
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Re: WellsTrade and Vanguard Mutual funds - Maybe exit

Post by chrissyp » Wed Dec 06, 2017 1:55 pm

livesoft wrote:
Wed Dec 06, 2017 12:32 pm
If you can sell specific shares "versus-purchase" online by a secure message or by phone at no additional cost (i.e. it is still free), then I don't see what the problem would be except for your anxiety. You seem to be fine asking questions on this forum which is exactly how the secure message setup works at WellsTrade, right?

Vanguard is probably not telling the truth about a VTSAX to VTI conversion. If you call again, you can ask them to read their web site back to you: https://investor.vanguard.com/etf/faqs

PS: Maybe edit your thread title to change munis to mutual funds please?
I don't know if you can do that via secure message. I have only read about it here. Wells is telling me I have to do the transaction by phone, but it occurs no additional cost.

You seem to have the most knowledge about this process since you went through it, IE the transferring of securities without fees and/or the ownership of mutual funds within Wells Fargo.

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