Fund exchanging

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DV Nayak
Posts: 9
Joined: Tue Feb 18, 2020 11:33 am

Fund exchanging

Post by DV Nayak » Sat Aug 01, 2020 1:46 pm

Is exchanging VYM To VFIAX in the same Vanguard taxable account same as selling one and buying another? What happens to the accrued tax gains? Thanks

02nz
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Joined: Wed Feb 21, 2018 3:17 pm

Re: Fund exchanging

Post by 02nz » Sat Aug 01, 2020 1:49 pm

It's the same as selling and buying, tax-wise (I'm not sure if there's a difference in time to settle). So if you have gains those would be realized and taxable.
Last edited by 02nz on Sat Aug 01, 2020 1:49 pm, edited 1 time in total.

livesoft
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Re: Fund exchanging

Post by livesoft » Sat Aug 01, 2020 1:49 pm

Yes, it is the same as selling VYM and buying VFIAX.

The accrued capital grains will be included in the money from selling VYM and can be used to buy shares of VFIAX. But it will also get reported on your 1099-B which will get it transferred as income to your Form 1040 which will then possibly get taxed depending on your personal tax situation.
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retired@50
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Re: Fund exchanging

Post by retired@50 » Sat Aug 01, 2020 1:52 pm

DV Nayak wrote:
Sat Aug 01, 2020 1:46 pm
Is exchanging VYM To VFIAX in the same Vanguard taxable account same as selling one and buying another? What happens to the accrued tax gains? Thanks
Selling one fund, then buying another, is the same as using the Vanguard "Exchange" function, assuming the Vanguard website will allow you to do this when one is an ETF and the other is a mutual fund.

Slight differences in settlement dates may or may not matter to Vanguard in this case. Call Vanguard to verify.

Regarding the tax consequences, whatever gain or loss the VYM position shows will appear on your year-end 1099-DIV or 1099-B which will require you to pay capital gains taxes or declare the capital loss and reduce your income.

Regards,
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Topic Author
DV Nayak
Posts: 9
Joined: Tue Feb 18, 2020 11:33 am

Re: Fund exchanging

Post by DV Nayak » Sat Aug 01, 2020 2:35 pm

Much appreciated! :happy

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