Mintax Cost Basis vs Specific Identification Cost Basis

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FIREGuy88
Posts: 169
Joined: Sun Nov 29, 2020 10:56 pm

Mintax Cost Basis vs Specific Identification Cost Basis

Post by FIREGuy88 »

I recently left Vanguard PAS, and got the following message:

If you had selected MinTax cost basis for your taxable managed accounts, they were changed to Specific Identification cost basis when you left the service. If you'd like to update those accounts to a different cost basis method, log on your Vanguard account or call 888-273-4205.

What does this mean? Should I switch it back to MinTax?
rkhusky
Posts: 13102
Joined: Thu Aug 18, 2011 8:09 pm

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by rkhusky »

FIREGuy88 wrote: Fri Aug 05, 2022 8:04 am I recently left Vanguard PAS, and got the following message:

If you had selected MinTax cost basis for your taxable managed accounts, they were changed to Specific Identification cost basis when you left the service. If you'd like to update those accounts to a different cost basis method, log on your Vanguard account or call 888-273-4205.

What does this mean? Should I switch it back to MinTax?
I don't think self-managed accounts can use MinTax. At least I've never seen that option. SpecID would be the next best option if you want to optimize the selling of shares in regards to taxation.
dbr
Posts: 41882
Joined: Sun Mar 04, 2007 9:50 am

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by dbr »

When you arrive at a point of selling shares, or choosing to sell shares, for example to tax loss harvest, you should evaluate your own minimum tax options. That would be part of managing your own investments. Spec ID is the most flexible accounting process to use. Note this interacts with your total tax picture and your overall array of assets meaning Mintax was not ever necessarily the best tax management for you.
Topic Author
FIREGuy88
Posts: 169
Joined: Sun Nov 29, 2020 10:56 pm

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by FIREGuy88 »

Got it. Since I don't plan on selling for 20 years, it sounds like I won't need to worry about this until then - correct?
rkhusky
Posts: 13102
Joined: Thu Aug 18, 2011 8:09 pm

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by rkhusky »

FIREGuy88 wrote: Sun Aug 07, 2022 5:31 pm Got it. Since I don't plan on selling for 20 years, it sounds like I won't need to worry about this until then - correct?
Unless you choose to TLH. Or need to sell shares for some reason.
https://www.bogleheads.org/wiki/Tax_loss_harvesting
Running Bum
Posts: 137
Joined: Sun Feb 10, 2013 2:00 pm

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by Running Bum »

I'd verify that your shares have SpecID basis, and not just take their word on it.
dbr
Posts: 41882
Joined: Sun Mar 04, 2007 9:50 am

Re: Mintax Cost Basis vs Specific Identification Cost Basis

Post by dbr »

Running Bum wrote: Sun Aug 07, 2022 7:06 pm I'd verify that your shares have SpecID basis, and not just take their word on it.
Yes, and then if you do sell verify that they have executed according to that designation even if it appears to be in place.
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