TLH with a recent purchase in Vanguard Roth (FIFO)

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MotoTrojan
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TLH with a recent purchase in Vanguard Roth (FIFO)

Post by MotoTrojan » Wed Oct 10, 2018 2:38 pm

Situation: Haven't bought VXUS in well over 30 days, except for <1 share in Roth on 10/1 due to dividend reinvestment.

I want to harvest some VXUS in taxable for VEU. If I sell a share of VXUS in Roth and purchase VEU there, do I avoid the wash even though it shows my Roth as FIFO?

If I didn't do anything in my Roth, would Vanguard flag this considering both accounts are held there?

livesoft
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by livesoft » Wed Oct 10, 2018 2:45 pm

I don't think selling a share in the Roth works that way, so you will have a partial wash sale.

Vanguard will not flag it as a wash sale because two different accounts are involved.

I don't see a problem with a partial wash sale from 1 share.
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MotoTrojan
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by MotoTrojan » Wed Oct 10, 2018 2:56 pm

livesoft wrote:
Wed Oct 10, 2018 2:45 pm
I don't think selling a share in the Roth works that way, so you will have a partial wash sale.

Vanguard will not flag it as a wash sale because two different accounts are involved.

I don't see a problem with a partial wash sale from 1 share.
Interesting, I presumed by the letter of the law that my sale of 1 share prior to the taxable event was as if I hadn't bought the <1 share from the dividend.

Mind pointing me in the direction of how I would report this myself? Just for the exercise it would be interesting. Not terribly afraid of them coming after me for <$1 in reduced taxation (rounding error).

livesoft
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by livesoft » Wed Oct 10, 2018 3:02 pm

It's all described in excruciating detail:
viewtopic.php?t=179414

But a day like today I think shows why one should not be afraid of wash sales.
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Longdog
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by Longdog » Wed Oct 10, 2018 3:31 pm

livesoft wrote:
Wed Oct 10, 2018 3:02 pm
It's all described in excruciating detail:
viewtopic.php?t=179414

But a day like today I think shows why one should not be afraid of wash sales.
As a general rule, isn’t a wash sale with replacement shares in a retirement account always to be avoided?
What’s the benefit of that transaction?
Steve

livesoft
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by livesoft » Wed Oct 10, 2018 3:44 pm

The wash sale described in this thread will not amount to much of a disallowed loss, but maybe today was a market low for the next 12 months and perfect time to buy. One would not way to avoid buying just because it would create an inconsequential wash sale. That would be like cutting off your nose to spite your face.
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nolesrule
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Re: TLH with a recent purchase in Vanguard Roth (FIFO)

Post by nolesrule » Wed Oct 10, 2018 6:39 pm

What's the threshold for inconsequential?

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