Tax Loss Harvesting in a Crazy Market

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tech123
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Tax Loss Harvesting in a Crazy Market

Post by tech123 » Wed Mar 25, 2020 1:20 pm

I would like to sell VFWAX and buy VTIAX. However, by selling today, it will only have the money available tomorrow to buy — and in a day there could be large swing and I could come out ahead or behind significantly on what ideally is just a neutral transfer in order to capture losses. Is there a way to mitigate this problem?

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Mountain Doc
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Re: Tax Loss Harvesting in a Crazy Market

Post by Mountain Doc » Wed Mar 25, 2020 1:23 pm

Is this in a Vanguard account? If so, you can do an exchange and both will execute today.

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iceport
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Re: Tax Loss Harvesting in a Crazy Market

Post by iceport » Wed Mar 25, 2020 1:24 pm

tech123 wrote:
Wed Mar 25, 2020 1:20 pm
I would like to sell VFWAX and buy VTIAX. However, by selling today, it will only have the money available tomorrow to buy — and in a day there could be large swing and I could come out ahead or behind significantly on what ideally is just a neutral transfer in order to capture losses. Is there a way to mitigate this problem?
Why not just use a direct fund-to-fund "exchange" order? The sell and buy will occur simultaneously at the next close of business, and you won't be out of the market for even one second.
"Discipline matters more than allocation.” ─William Bernstein

stocknoob4111
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Re: Tax Loss Harvesting in a Crazy Market

Post by stocknoob4111 » Wed Mar 25, 2020 1:25 pm

as the poster above said you do an "eXchange" from one fund to another, both the sell and buy orders execute simultaneously at the end of day so this isn't a problem.

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LilyFleur
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Re: Tax Loss Harvesting in a Crazy Market

Post by LilyFleur » Wed Mar 25, 2020 2:16 pm

Does Schwab offer the simultaneous exchange as well? Thinking about TLH...

kaneohe
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Re: Tax Loss Harvesting in a Crazy Market

Post by kaneohe » Wed Mar 25, 2020 2:19 pm

LilyFleur wrote:
Wed Mar 25, 2020 2:16 pm
Does Schwab offer the simultaneous exchange as well? Thinking about TLH...
don't know about online, but Schwab has it on the real telebroker (not the voice activated one).

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tech123
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Re: Tax Loss Harvesting in a Crazy Market

Post by tech123 » Wed Mar 25, 2020 2:52 pm

Unfortunately I'm with J.P. Morgan's YouInvest and don't see an option for that. I've started the transfer to Vanguard, but it could take a while I think.

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tech123
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Re: Tax Loss Harvesting in a Crazy Market

Post by tech123 » Wed Mar 25, 2020 2:59 pm

Oh, actually YouInvest has that option.

SteveJones
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Re: Tax Loss Harvesting in a Crazy Market

Post by SteveJones » Wed Mar 25, 2020 6:16 pm

There is one thing I can't get answered after reading the wikipages. There is no question my Vanguard taxable accounts are down for the year. They are however up since I've owned them. Can I still TLH to a different, but similar account because of the YTD losses?

lakpr
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Re: Tax Loss Harvesting in a Crazy Market

Post by lakpr » Wed Mar 25, 2020 6:22 pm

SteveJones wrote:
Wed Mar 25, 2020 6:16 pm
There is one thing I can't get answered after reading the wikipages. There is no question my Vanguard taxable accounts are down for the year. They are however up since I've owned them. Can I still TLH to a different, but similar account because of the YTD losses?
First thing you need to do in Vanguard is to turn on the Specific ID tracking basis. Then it would show you which specific lots you own that are showing losses, and you can choose to sell only those lots for the losses. If even after the drop your lots are all in the green (strongly suggests that you bought those lots in 2017 or earlier), then no, there is no TLH for you, at least not something that I'd see as worthwhile.

I'd think it is obvious, that unless the specific shares that you bought showed losses you cannot claim losses on your tax return.

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