Tax Loss Harvest (TLH) Question

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Ghostman
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Joined: Tue Jul 04, 2017 6:32 pm

Tax Loss Harvest (TLH) Question

Post by Ghostman » Fri Jan 11, 2019 2:47 pm

Hello Bogleheads.

I have a question regarding tax loss harvesting. I had tax loss harvested twice during November-December 2018.

The first time I harvested losses I made the following trades:
  • Sold all shares of Vanguard Total Stock Market Index Fund and bought Vanguard Large Cap Index Fund
  • Sold all shares of Vanguard Total International Stock Index Fund and bought Vanguard FTSE All-World ex-US Index Fund
The second time I harvested losses I made the following trades:
  • Sold all shares of Vanguard Large Cap Index Fund and bought Vanguard 500 Index Fund + Vanguard Extended Market Index Fund
  • Sold all shares of Vanguard FTSE All-World ex-US Index Fund and bought Vanguard Developed Markets Index Fund + Vanguard Emerging Markets Stock Index Fund
So now it has been 30 days and ideally I would like to get back into Total Stock Market and Total International but I now have large gains. Not a bad problem to have I suppose. I plan on just maintaining my current positions in Vanguard 500 + Extended Market and Developed Markets + Emerging Markets. My question is for any new contributions going forward should I direct them to Vanguard 500 + Extended Market and Developed Markets + Emerging Markets OR start buying Total Stock Market and Total International again?

Thanks for reading and any help.

livesoft
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Re: Tax Loss Harvest (TLH) Question

Post by livesoft » Fri Jan 11, 2019 4:31 pm

I'd go back to Total Stock and Total International myself. That is, I would open new holdings in these two funds.

Presumably you still own shares of Total Stock and Total International that you did not have to sell because they had gains from long ago. But I guess my presumption is wrong since you wrote you sold all shares.
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Raybo
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Re: Tax Loss Harvest (TLH) Question

Post by Raybo » Fri Jan 11, 2019 6:35 pm

I have a similar problem in that I've done some tax-loss harvesting in TSM and have ended up with the S&P500 and Extended Market funds. I find trying to balance these 2 funds to recreate the TSM coverage to be a bother. I'm living off the money I am harvesting, so I'm not buying anymore in my after-tax account. But, if I was investing more in my after-tax account, I start buying TSM, just to keep things simple.
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Ghostman
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Re: Tax Loss Harvest (TLH) Question

Post by Ghostman » Fri Jan 11, 2019 7:50 pm

Yes I sold all shares in Total Stock and Total International and now only hold 500 Index + Extended Market Index AND Developed Markets Index + Emerging Markets Index.

So if I started purchasing Total Stock and Total International again with my new contributions would I just leave the holdings that are in 500 Index + Extended Market Index AND Developed Markets Index + Emerging Markets Index alone until there comes another time in the future to harvest another loss?

Thanks again for the insight!

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Tax Loss Harvest (TLH) Question

Post by livesoft » Fri Jan 11, 2019 7:52 pm

I'd leave them alone until they had long-term capital gains and I needed to donate them to charity ... or until they had losses and I sold them at a loss.
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Davinci
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Re: Tax Loss Harvest (TLH) Question

Post by Davinci » Fri Jan 11, 2019 11:39 pm

I exchanged all my VTSAX to VLCAX ($100k) on 12/29/18
I exchanged all my VTIAX to VFWAX ($50k) on 12/29/18

Should I exchange to VTSAX/VTIAX again on 2/1/19, no wash sale, taxes on gains?

I am starting my after tax contributions in February as well so I can buy VTSAX/VTIAX again, no wash sale?

Thanks!
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.

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PhysicianOnFIRE
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Re: Tax Loss Harvest (TLH) Question

Post by PhysicianOnFIRE » Fri Jan 11, 2019 11:51 pm

Ghostman wrote:
Fri Jan 11, 2019 2:47 pm
Hello Bogleheads.

I have a question regarding tax loss harvesting. I had tax loss harvested twice during November-December 2018.

The first time I harvested losses I made the following trades:
  • Sold all shares of Vanguard Total Stock Market Index Fund and bought Vanguard Large Cap Index Fund
  • Sold all shares of Vanguard Total International Stock Index Fund and bought Vanguard FTSE All-World ex-US Index Fund
The second time I harvested losses I made the following trades:
  • Sold all shares of Vanguard Large Cap Index Fund and bought Vanguard 500 Index Fund + Vanguard Extended Market Index Fund
  • Sold all shares of Vanguard FTSE All-World ex-US Index Fund and bought Vanguard Developed Markets Index Fund + Vanguard Emerging Markets Stock Index Fund
So now it has been 30 days and ideally I would like to get back into Total Stock Market and Total International but I now have large gains. Not a bad problem to have I suppose. I plan on just maintaining my current positions in Vanguard 500 + Extended Market and Developed Markets + Emerging Markets. My question is for any new contributions going forward should I direct them to Vanguard 500 + Extended Market and Developed Markets + Emerging Markets OR start buying Total Stock Market and Total International again?

Thanks for reading and any help.
You should always exchange into funds you'd be comfortable holding indefinitely. It sounds like you have.

I would direct new investments to the two original funds (VTSAX, VTIAX) as long as 31 days has passed since you sold them for a loss.

:beer
-PoF

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Ghostman
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Re: Tax Loss Harvest (TLH) Question

Post by Ghostman » Mon Jan 14, 2019 8:32 pm

Thanks everyone for the advice!

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