Anyone tax loss harvesting bond funds?

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hirlaw
Posts: 254
Joined: Tue Sep 29, 2009 10:20 am

Anyone tax loss harvesting bond funds?

Post by hirlaw » Wed Oct 10, 2018 6:19 pm

Is anyone tax loss harvesting bond funds or ETF's held in a taxable account? I have a couple that have some losses. I have pulled the trigger on one, but not the other.

minesweep
Posts: 1206
Joined: Fri Mar 02, 2007 9:17 pm
Location: PA

Re: Anyone tax loss harvesting bond funds?

Post by minesweep » Wed Oct 10, 2018 9:44 pm

Last week I harvested a $1,012 loss in a bond fund. I switched from the intermediate-term tax-exempt bond fund to the limited-term tax-exempt bond fund.

BigJohn
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Joined: Wed Apr 02, 2014 11:27 pm

Re: Anyone tax loss harvesting bond funds?

Post by BigJohn » Wed Oct 10, 2018 10:34 pm

I also harvested a loss in intermediate term tax-exempt bond fund around the first of this month. I went 50/50 long/limited term tax exempt and if things keep going like they have been this week, I'll probably harvest again around the first of next month. I'm using the losses to unwind some very old stock positions and move to total stock index.

SpideyIndexer
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Joined: Thu Apr 02, 2015 10:13 pm

Re: Anyone tax loss harvesting bond funds?

Post by SpideyIndexer » Wed Oct 10, 2018 10:49 pm

Yep. I had some short term index that I had been meaning to relocate from taxable and did so.

midagelawyer
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Joined: Sun Jan 29, 2017 11:37 am

Re: Anyone tax loss harvesting bond funds?

Post by midagelawyer » Wed Oct 10, 2018 11:07 pm

Yup. Harvesting my losses in muni bond funds.

harvestbook
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Re: Anyone tax loss harvesting bond funds?

Post by harvestbook » Thu Oct 11, 2018 8:02 am

I'll probably sell some munis out of the taxable near year end if I haven't filled up my Roth IRA yet, and probably sell enough to immediately fund our 2019 HSA on Jan. 1. The tax-loss part is negligible enough that I might just wait until next year.
I'm not smart enough to know, and I can't afford to guess.

Big Dog
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Joined: Mon Sep 07, 2015 4:12 pm

Re: Anyone tax loss harvesting bond funds?

Post by Big Dog » Thu Oct 11, 2018 9:17 am

rookie question: if one is in a tax-free fund like the vanguard California Tax Exempt (VACDX), is tax loss harvesting even doable?

SpideyIndexer
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Joined: Thu Apr 02, 2015 10:13 pm

Re: Anyone tax loss harvesting bond funds?

Post by SpideyIndexer » Thu Oct 11, 2018 1:26 pm

Big Dog wrote:
Thu Oct 11, 2018 9:17 am
rookie question: if one is in a tax-free fund like the vanguard California Tax Exempt (VACDX), is tax loss harvesting even doable?
Yes, you are realizing a loss in the value of the fund shares. This is entirely separate from the fact the the interest earned in VCADX is not taxed.

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dratkinson
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Location: Centennial CO

Re: Anyone tax loss harvesting bond funds?

Post by dratkinson » Thu Oct 11, 2018 1:39 pm

Big Dog wrote:
Thu Oct 11, 2018 9:17 am
rookie question: if one is in a tax-free fund like the vanguard California Tax Exempt (VACDX), is tax loss harvesting even doable?
VADCX perhaps?

The short answer. Yes. A TLH is based on the fund's NAV.

So if you have a loss on paper, you account for that on your taxes if you sell.

Just like if you have a profit on paper, you account for that on your taxes if you sell.



Potential gotcha. Make sure you meet any holding period requirement to protect tax-exempt dividends.
See "Loss on mutual fund shares held 6 months or less": https://www.bogleheads.org/wiki/Tax_los ... harvesting

I'm not familiar with VADCX, so you'll need to check the prospectus for "accrual" type: daily or monthly.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

Whakamole
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Joined: Wed Jan 13, 2016 9:59 pm

Re: Anyone tax loss harvesting bond funds?

Post by Whakamole » Thu Oct 11, 2018 1:46 pm

Yes, sold a short-term bond fund. Keeping it in the money market fund right now, since rates are pretty good and this gives me a bit more flexibility to do TLH in my stock funds/ETFs.

bhsince87
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Re: Anyone tax loss harvesting bond funds?

Post by bhsince87 » Thu Oct 11, 2018 2:01 pm

Yep. A state muni fund and intermediate term corp fund.

Booked about $5k loss.

Today is actually day 31, so I'll likely buy back in tomorrow or early next week.

I parked the munis in tax free muni money market and the other in short term treasuries. Looks like the treasuries are down about $300 over the last 30 days, so I guess I'll book that loss too.
Retirement: When you reach a point where you have enough. Or when you've had enough.

Big Dog
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Re: Anyone tax loss harvesting bond funds?

Post by Big Dog » Thu Oct 11, 2018 2:07 pm

thanks, all. I'll probably just leave it in the Fed MMF.

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NYCPete
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Location: New York, NY

Re: Anyone tax loss harvesting bond funds?

Post by NYCPete » Thu Oct 11, 2018 2:20 pm

hirlaw wrote:
Wed Oct 10, 2018 6:19 pm
Is anyone tax loss harvesting bond funds or ETF's held in a taxable account? I have a couple that have some losses. I have pulled the trigger on one, but not the other.
Yep! And really interested to see that I'm not the only one who's been doing this. I TLH'd out of Vanguard NY Muni long term earlier this year for a ~$1.2K loss. I just sat on the cash in Federal MM for 30 days before going back in. I've already got an alarm set for late in the year to assess whether to do it again. Though this time I'll dump the proceeds into NY Muni money market fund for the 30 days.

When I've done the math for my situation, if I was simply letting things ride and reinvesting interest payments, I'd probably break even this year. With the TLH that I've done, I'll likely see a positive net return after counting all the interest payments and the savings from the capital loss on my taxes.

Seems crazy, but I'll take it.

Best,
Peter
To the extent that a fool knows his foolishness, | He may be deemed wise | A fool who considers himself wise | Is indeed a fool. | | Buddha

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