tax-exempt bond pairings for TLH

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healthiswealth
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tax-exempt bond pairings for TLH

Post by healthiswealth »

Would like to tax loss harvest Vanguard Intermediate Term tax exempt bond fund (VWIUX). Want to confirm that Vanguard Tax Exempt Bond Fund (VTEAX) would be a good pair. Read through several prior posts, but it was difficult to decipher whether this pairing works.

Auto-investing has been turned off for several weeks.

Any ramifications if I exchange all the funds? Or should I only exchange my lots with long-term losses?
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Duckie
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Re: tax-exempt bond pairings for TLH

Post by Duckie »

healthiswealth wrote: Thu May 12, 2022 11:00 am Would like to tax loss harvest Vanguard Intermediate Term tax exempt bond fund (VWIUX). Want to confirm that Vanguard Tax Exempt Bond Fund (VTEAX) would be a good pair.
While similar they are not "substantially identical". VWIUX is an active fund and VTEAX is an index fund. That criteria alone makes them possible TLH partners.
Any ramifications if I exchange all the funds? Or should I only exchange my lots with long-term losses?
Selling lots with short-term losses is better than long-term losses. If you sell all of VWIUX would you still have a net loss?
Gill
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Re: tax-exempt bond pairings for T

Post by Gill »

Duckie wrote: Thu May 12, 2022 5:12 pm Selling lots with short-term losses is better than long-term losses.
I’ve seen this statement made by others. This may have been correct under earlier tax law but I see no distinction under current law.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
TSC15
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Re: tax-exempt bond pairings for TLH

Post by TSC15 »

VTEAX declares and pay dividend monthly, so if you want to TLH later within 6 months of purchase the loss will be reduced by the amount of dividend earned per IRS rules.
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neurosphere
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Re: tax-exempt bond pairings for T

Post by neurosphere »

Gill wrote: Thu May 12, 2022 5:46 pm
Duckie wrote: Thu May 12, 2022 5:12 pm Selling lots with short-term losses is better than long-term losses.
I’ve seen this statement made by others. This may have been correct under earlier tax law but I see no distinction under current law.
Gill
I want to learn more about this (these) statements about short-term vs long-term losses and current vs previous (and future?) law. Does anyone happen to have a link/reference for first steps which will point me in the right direction?
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Artsdoctor
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Re: tax-exempt bond pairings for TLH

Post by Artsdoctor »

TSC15 wrote: Thu May 12, 2022 5:57 pm VTEAX declares and pay dividend monthly, so if you want to TLH later within 6 months of purchase the loss will be reduced by the amount of dividend earned per IRS rules.
This is important. VTEAX (or VTEB) is not nearly as easy to TLH given the monthly accrual. You're going to want a fund that accrues interest daily.
Gill
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Re: tax-exempt bond pairings for T

Post by Gill »

neurosphere wrote: Thu May 12, 2022 6:33 pm
Gill wrote: Thu May 12, 2022 5:46 pm
Duckie wrote: Thu May 12, 2022 5:12 pm Selling lots with short-term losses is better than long-term losses.
I’ve seen this statement made by others. This may have been correct under earlier tax law but I see no distinction under current law.
Gill
I want to learn more about this (these) statements about short-term vs long-term losses and current vs previous (and future?) law. Does anyone happen to have a link/reference for first steps which will point me in the right direction?
The point is there is no difference under current law whereas at one time there was.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
Topic Author
healthiswealth
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Re: tax-exempt bond pairings for TLH

Post by healthiswealth »

Yes, I have both short(3500) and long term(4500) losses totaling 8k.

Regarding the monthly dividend issue, are there any other options for intermediate term? If not, I noticed the short term (VMLUX) or limited term tax exempt bonds (VMLTX), would either of those work?

Thanks!
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neurosphere
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Re: tax-exempt bond pairings for T

Post by neurosphere »

Gill wrote: Thu May 12, 2022 8:04 pm
neurosphere wrote: Thu May 12, 2022 6:33 pm
Gill wrote: Thu May 12, 2022 5:46 pm
Duckie wrote: Thu May 12, 2022 5:12 pm Selling lots with short-term losses is better than long-term losses.
I’ve seen this statement made by others. This may have been correct under earlier tax law but I see no distinction under current law.
Gill
I want to learn more about this (these) statements about short-term vs long-term losses and current vs previous (and future?) law. Does anyone happen to have a link/reference for first steps which will point me in the right direction?
The point is there is no difference under current law whereas at one time there was.
Gill
Sorry, I was asking a basic question that I asked in a way that was confusing. I guess the question is, approximately when was the last time there was a difference in treatment of short-term and long-term losses? Or, which law which was passed created the change from where short-term losses were better, to where they were the same as long-term losses?
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
Topic Author
healthiswealth
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Re: tax-exempt bond pairings for TLH

Post by healthiswealth »

So it looks like all these bond fund options have monthly dividends? unless I'm misinterpreting the distinction between how they're accruing vs. when it's getting paid out?
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