converting mutual funds to ETF

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Topic Author
boater07
Posts: 711
Joined: Sun Apr 15, 2007 7:44 pm
Location: Northwest

converting mutual funds to ETF

Post by boater07 »

I use specific id on the V brokerage accts. What happens to my cost basis if I convert to etf?
I'm perhaps being paranoid, but wonder if my old cost basis will remain or the new piurchase
cost?
Hope my question makes sense
exodusNH
Posts: 5437
Joined: Wed Jan 06, 2021 8:21 pm

Re: converting mutual funds to ETF

Post by exodusNH »

boater07 wrote: Wed Sep 21, 2022 10:20 pm I use specific id on the V brokerage accts. What happens to my cost basis if I convert to etf?
I'm perhaps being paranoid, but wonder if my old cost basis will remain or the new piurchase
cost?
Hope my question makes sense
If you call Vanguard, ask for the trading desk, and ask them to do the conversion, you will wind up with an equal number of lots with the cost basis equivalent of your mutual fund shares. E.g. if you bought 1 share of the mutual fund at $100 and on that day the ETF was $50/share, you will have 2 shares of the ETF for a total cost of $100. This will not incur taxes.

If you sell your mutual funds and buy the ETF equivalent, you will wind up with a single large lot with the cost basis as of the purchase date. In a taxable account, this may incur taxes. Don't do this.
Topic Author
boater07
Posts: 711
Joined: Sun Apr 15, 2007 7:44 pm
Location: Northwest

Re: converting mutual funds to ETF

Post by boater07 »

Thank you for the explanation
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