Tax Loss Harvest Partners

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Topic Author
nycinvestor
Posts: 4
Joined: Thu May 05, 2016 10:19 am

Tax Loss Harvest Partners

Post by nycinvestor » Wed Dec 28, 2016 12:55 pm

Hi all,

I would like to tax loss harvest FIDELITY INTERNATL INDEX PREMIUM CLASS (FSIVX). Can I sell FSIVX and buy instead Vanguard Developed Markets Index Fund Admiral Shares (VTMGX)? Or are they too similar in IRS's mind?

Also, can I use Fidelity Emerging Market Fund Premium Class (FPMAX) as a substitute fund for Vanguard Emerging Market Admiral Shares fund (VEMAX)? Or IRS would consider them identical?

Thank you in advance for your help.

Edited to say that I have taxable accounts at both Vanguard and Fidelity.
Last edited by nycinvestor on Wed Dec 28, 2016 5:37 pm, edited 2 times in total.

DSInvestor
Posts: 11024
Joined: Sat Oct 04, 2008 11:42 am

Re: Tax Loss Harvest Partners

Post by DSInvestor » Wed Dec 28, 2016 1:01 pm

If investing at Fidelity, I would not use Vanguard mutual funds as TLH partners as a $75 transaction fee applies for the purchase. Instead I would use Fidelity index funds. Vanguard funds are not included in No Transaction Fee (NTF) lists of funds outside of Vanguard.

I assume you're using a separate emerging markets fund because International index fund does not include EM. Assuming you're not overweighting EM, I would use Fidelity Global ex-US FSGDX or Fidelity Total International FTIPX as TLH partner for both International Index and EM index. Both FSGDX and FTIPX include emerging markets at about 22%.

When selecting the TLH replacement fund, make sure you'd be comfortable holding it forever.
Wiki

Topic Author
nycinvestor
Posts: 4
Joined: Thu May 05, 2016 10:19 am

Re: Tax Loss Harvest Partners

Post by nycinvestor » Wed Dec 28, 2016 5:34 pm

thank you for the reply DSIinvestor.

I actually have taxable accounts at both Vanguard and Fidelity. I was hoping I could substitute Vanguard fund for Fidelity fund, as in my opinion they are not identical. Wanted to hear if the IRS would agree with my opinion.

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Earl Lemongrab
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Joined: Tue Jun 10, 2014 1:14 am

Re: Tax Loss Harvest Partners

Post by Earl Lemongrab » Fri Dec 30, 2016 4:03 pm

nycinvestor wrote:Also, can I use Fidelity Emerging Market Fund Premium Class (FPMAX) as a substitute fund for Vanguard Emerging Market Admiral Shares fund (VEMAX)? Or IRS would consider them identical?
No one knows. If anyone says they know, they're wrong unless they can produce a ruling from an auditor. I've never seen one. The IRS has never provided any specific guidance.

Right now, custodians are required to report exact fund wash sales in the same account. I don't personally believe that the IRS will ever declare a wash between different funds, especially from different fund companies.

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noraz123
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Location: SF Bay Area

Re: Tax Loss Harvest Partners

Post by noraz123 » Fri Dec 30, 2016 4:49 pm

Earl Lemongrab wrote:
nycinvestor wrote:I don't personally believe that the IRS will ever declare a wash between different funds, especially from different fund companies.
+1. Funds of different mutual funds providers (Vanguard vs. Fidelity) should not trigger wash sales. I would think that even an S&P500 fund at Fidelity would be considered different enough than a S&P500 fund at Vanguard (but I am neither an accountant, lawyer or IRS auditor).

With that said, I think DSInverstor's advice is spot on. First, if you are account is at Fidelity and will be buying/selling there, stick with Fidelity funds to minimize transaction costs. Second, I would second DSInvestor's advice of funds to TLH.

Last, perhaps not applicable to your exact question of funds, I am posting these links in the wiki for other readers:

Bogleheads' wiki article for substitute ETFs for various classes https://www.bogleheads.org/wiki/Tax_los ... tute_funds

Bogleheads' wiki article for approximating total international - https://www.bogleheads.org/wiki/Approxi ... ock_market

Bogleheads' wiki article for approximating total stock market - https://www.bogleheads.org/wiki/Approxi ... ock_market

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