Tax Loss Harvesting [Will this trigger a wash sale?]

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kmn99
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Tax Loss Harvesting [Will this trigger a wash sale?]

Post by kmn99 » Mon Dec 03, 2018 7:11 pm

If I sell IXUS and buy VXUS within 30 days, will it trigger wash sale?

student
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Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by student » Mon Dec 03, 2018 7:57 pm

No. IXUS follows MSCI ACWI ex USA IMI index with 3465 holdings as of 6/30/2018. VXUS follows FTSE Global All Cap ex US Index with 6354 holdings as of 7/31/2018.

kmn99
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Joined: Mon Dec 03, 2018 7:09 pm

Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by kmn99 » Mon Dec 03, 2018 8:04 pm

Thank you. And Do you guys advice moving to VXUS or is there a better ETF or Mutual Fund tracking Total International Stock Market. So glad I found this forum :happy

student
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Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by student » Mon Dec 03, 2018 8:23 pm

kmn99 wrote:
Mon Dec 03, 2018 8:04 pm
Thank you. And Do you guys advice moving to VXUS or is there a better ETF or Mutual Fund tracking Total International Stock Market. So glad I found this forum :happy
I think VXUS is a good one. You can consider VEA but it invests in developed countries only. I will go with VXUS.

kmn99
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Joined: Mon Dec 03, 2018 7:09 pm

Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by kmn99 » Mon Dec 03, 2018 8:25 pm

:thumbsup

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Earl Lemongrab
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Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by Earl Lemongrab » Wed Dec 05, 2018 5:17 pm

The most accurate answer is that no one knows. The IRS has provided very little guidance on what would be considered substantially identical securities. There are essentially no cases that anyone has reported where the IRS has ruled two different funds to be substantially identical. That only means that we can't look to case law for guidance, and that probably it's not a priority for the IRS.

The only thing that they require that custodians report are cases of identical securities. It's not clear whether Vanguard would report a sale and purchase of share classes of funds (like sell VTI for a loss and buy VTSAX).

Anyone who says definitively that the transaction you list is NOT a wash sale is wrong. They don't have that knowledge. It of course does not mean that the converse is true. There are various opinions and "probabilities" that are also opinions. A common opinion here is that different indexes will avoid a wash sale but no one has a ruling from the IRS that supports this.

At one time, an IRS publication stated that funds from different fund companies are usually not substantially identical. That pub is now obsolete, so whether the philosophy is still effect at the IRS is another matter of opinion. My opinion is that it is, and so swapping (as I have done) VOO for IVV is not a wash.

In my opinion the funds you list are not substantially identical.
Last edited by Earl Lemongrab on Fri Dec 07, 2018 12:42 am, edited 1 time in total.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

kmn99
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Joined: Mon Dec 03, 2018 7:09 pm

Re: Tax Loss Harvesting [Will this trigger a wash sale?]

Post by kmn99 » Thu Dec 06, 2018 10:28 pm

Thank you for the response.

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