VOO a reasonable alternative to VTI to avoid wash sale

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Bluemnatra
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VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

I currently hold VTI in taxable because my previous employer only had a s&p 500 index fund. However, my new employer has the vanguard institutional total stock market index fund trust that I’m going to use. I’m thinking of TLH VTI to VOO and using VOO from now on in taxable. I know ITOT is an option, but I favor vanguard funds.
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Florida Orange
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Florida Orange »

Yes, it's a reasonable alternative. VOO is not substantially identical to VTI.
livesoft
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by livesoft »

Another reasonable alternative is VV (Vanguard Large-cap Index). Full disclosure: I own shares of VTI and VV.
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nalor511
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by nalor511 »

ITOT and SCHB are tickers I would use before VOO
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Bluemnatra
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
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nalor511
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by nalor511 »

Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
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Bluemnatra
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
Thanks. Do you ever take trading volume and liquidity into consideration?
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Fpdesignco
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Fpdesignco »

Bluemnatra wrote: Mon Nov 21, 2022 3:39 pm
nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
Thanks. Do you ever take trading volume and liquidity into consideration?
Are you day trading index funds ?
exodusNH
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by exodusNH »

Bluemnatra wrote: Mon Nov 21, 2022 3:39 pm
nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
Thanks. Do you ever take trading volume and liquidity into consideration?
VOO is perfectly fine.

Here are the two funds, going back to 1992: https://www.portfoliovisualizer.com/bac ... ion2_2=100
rkhusky
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by rkhusky »

nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
According to Morningstar's definitions, VOO consists of Giant, Large, and Mid-Cap stocks. And VV has about 600 stocks.
nalor511
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by nalor511 »

Bluemnatra wrote: Mon Nov 21, 2022 3:39 pm
nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
Thanks. Do you ever take trading volume and liquidity into consideration?
I only TLH between VTI/ITOT/VV, VXUS/IXUS/VEU, I haven't had any issues
nalor511
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by nalor511 »

rkhusky wrote: Mon Nov 21, 2022 3:48 pm
nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
According to Morningstar's definitions, VOO consists of Giant, Large, and Mid-Cap stocks. And VV has about 600 stocks.
Noted. I would personally have used ITOT and called it a day, but OP can obviously choose the one they're comfortable with
retire2022
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by retire2022 »

Fpdesignco wrote: Mon Nov 21, 2022 3:42 pm
Are you day trading index funds ?
I am assuming you are referring to this in jest, Vanguard has trading limits and as far as I am aware one needs a “pattern day trading designation” and account which allows for margin in taxable accounts.

https://www.investopedia.com/terms/p/pa ... trader.asp

Fidelity and TD Ameritrade allows for pattern day trading designated account holders.
exodusNH
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by exodusNH »

nalor511 wrote: Mon Nov 21, 2022 3:12 pm
Bluemnatra wrote: Mon Nov 21, 2022 2:55 pm
nalor511 wrote: Mon Nov 21, 2022 2:19 pm ITOT and SCHB are tickers I would use before VOO
How come?

I’ve also read blackrock is more aggressive with securities lending and vanguard returns more to the investor which results in a better return.
Because voo is only 500 mega cap stocks, too concentrated for my tastes. Itot and schb are thousands. VV is also thousands as livesoft suggested
The S&P 500 is roughly 85% of the total US market. Over 30 years, the difference between $10,000 invested is about $3,700 in favor of the S&P 500.

While I prefer total market from a theoretical perspective, there is practically no difference between the two.
Ferdinand2014
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Ferdinand2014 »

Yes, entirely reasonable. matches or beats performance of VTI. substantially different. highly liquid. Super low cost. Stays in the fund family you prefer. Any other answer are angels dancing on the head of a pin.
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (taxes).
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Bluemnatra
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
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exodusNH
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by exodusNH »

Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
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Bluemnatra
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

exodusNH wrote: Tue Nov 22, 2022 11:50 pm
Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
Negative, only a total market. Endlessly debated in that do funds within a 401k violate the wash sale?
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Marseille07 »

exodusNH wrote: Tue Nov 22, 2022 11:50 pm
Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
I thought you have to wait 30 days since VTSAX and VTI are substantially identical or whatever the language being used.
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exodusNH
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by exodusNH »

Bluemnatra wrote: Tue Nov 22, 2022 11:55 pm
exodusNH wrote: Tue Nov 22, 2022 11:50 pm
Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
Negative, only a total market. Endlessly debated in that do funds within a 401k violate the wash sale?
Yes. Some people have made compelling arguments that 401ks don't count in wash sales. Others make arguments that there's nothing explicitly excluding them. And so it goes, like the dividend and international discussions. Since I have a 500 index in my 401k, I avoid the issue by holding total market in taxable. It's really a matter of how paranoid of an audit you are. I don't know where I fall on the argument because I can easily side-step the issue.

It only matters if you're trying to claim a loss in taxable. If not, there's no issue at all. Wash sales aren't illegal. They either defer the loss until you sell in the future or completely disallow it because you don't have an "basis" in a tax-advantaged account.
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by exodusNH »

Marseille07 wrote: Tue Nov 22, 2022 11:59 pm
exodusNH wrote: Tue Nov 22, 2022 11:50 pm
Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
I thought you have to wait 30 days since VTSAX and VTI are substantially identical or whatever the language being used.
Definitely in taxable and definitely with IRAs. There's been a lot of debate here that 401ks don't participate because they're employer-controlled and the IRS didn't explicitly include them in the rules. The other side is that the IRS didn't explicitly exclude them. Both sides have reasonable arguments. It's up to the reader to make a decision based on how conservative you want to be.
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Marseille07 »

exodusNH wrote: Wed Nov 23, 2022 12:09 am Definitely in taxable and definitely with IRAs. There's been a lot of debate here that 401ks don't participate because they're employer-controlled and the IRS didn't explicitly include them in the rules. The other side is that the IRS didn't explicitly exclude them. Both sides have reasonable arguments. It's up to the reader to make a decision based on how conservative you want to be.
Thank you, I wasn't aware about the wash sale implications of 401K. I'm like you though, I hold different instruments in pretax and taxable to avoid this issue entirely.
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by rkhusky »

Marseille07 wrote: Wed Nov 23, 2022 12:12 am
exodusNH wrote: Wed Nov 23, 2022 12:09 am Definitely in taxable and definitely with IRAs. There's been a lot of debate here that 401ks don't participate because they're employer-controlled and the IRS didn't explicitly include them in the rules. The other side is that the IRS didn't explicitly exclude them. Both sides have reasonable arguments. It's up to the reader to make a decision based on how conservative you want to be.
Thank you, I wasn't aware about the wash sale implications of 401K. I'm like you though, I hold different instruments in pretax and taxable to avoid this issue entirely.
And note that besides the wash sale law, there is also the related party transaction law, which disallows the claiming of losses when purchases are made by related parties. Trusts and corporate accounts are included as related parties, and 401k's and IRA's are trusts. Transactions subject to the wash sale law are exempt from the related party transaction law. This is all described in Pub 550. It's pretty clear that Congress does not support the claiming of paper-only losses, however it is accomplished.
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Bluemnatra
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by Bluemnatra »

And just to be clear that my understanding it correct, I have an S&P 500 fund in one of my IRA accounts that I'm going to exchange for Fidelity's ZERO total market index fund (FZROX). I'm not violating the wash sale by selling vanguard total market index ETF VTI and buying Vanguard S&P 500 ETF VOO in my taxable account, correct?
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by sycamore »

Marseille07 wrote: Tue Nov 22, 2022 11:59 pm
exodusNH wrote: Tue Nov 22, 2022 11:50 pm
Bluemnatra wrote: Tue Nov 22, 2022 11:44 pm So I've got to wait 30 days before I can buy the Vanguard Institutional Total Stock Market Index Trust in my 401k after selling VTI in my taxable brokerage?
This is endlessly debated here. No one knows for sure. There are reasonable arguments on both sides.

Do you have a s&p 500 fund? That's close enough for 30 days.
I thought you have to wait 30 days since VTSAX and VTI are substantially identical or whatever the language being used.
This is a nitpick but the question is not about VTSAX and VTI, it's about VTI and Vanguard Institutional Total Stock Market Index Trust (VITNX).
VTSAX and VTI are share classes of the same fund.
By contrast VITNX is a share class of a legally different fund.
But all of them follow the CRSP US Total Market Index.

VITNX distributes dividends and cap gains, whereas VTSAX and VTI don't (or haven't). That doesn't mean VITNX and VTI are not substantially identical, but I suppose one could make that argument :)
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Re: VOO a reasonable alternative to VTI to avoid wash sale

Post by rkhusky »

Bluemnatra wrote: Wed Nov 23, 2022 3:53 pm And just to be clear that my understanding it correct, I have an S&P 500 fund in one of my IRA accounts that I'm going to exchange for Fidelity's ZERO total market index fund (FZROX). I'm not violating the wash sale by selling vanguard total market index ETF VTI and buying Vanguard S&P 500 ETF VOO in my taxable account, correct?
Nope. If you sold VTI for a loss in taxable and bought VTI in the IRA, that would be a wash sale.
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