Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Has anyone had both a Vanguard Mutual Fund Account and a Vanguard Brokerage Account at the time they "upgraded" their Mutual Fund Account to a Brokerage Account as Vanguard has been requesting?
If so, what happened when you "upgraded" the Mutual Fund Account? Did you end up with two separate Brokerage Accounts? Or did Vanguard simply take your Mutual Funds and transfer them in kind to your existing Brokerage Account? Or something else?
And in all these transfers, did Vanguard maintain the correct cost basis on the Mutual Funds that they transferred to the new Brokerage Account or the existing Brokerage Account?
Thanks for any help in understanding what to expect in transistioning a Mutual Fund Account, when a Brokerage Account already exists.
If so, what happened when you "upgraded" the Mutual Fund Account? Did you end up with two separate Brokerage Accounts? Or did Vanguard simply take your Mutual Funds and transfer them in kind to your existing Brokerage Account? Or something else?
And in all these transfers, did Vanguard maintain the correct cost basis on the Mutual Funds that they transferred to the new Brokerage Account or the existing Brokerage Account?
Thanks for any help in understanding what to expect in transistioning a Mutual Fund Account, when a Brokerage Account already exists.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Yes I had both. I ended up with 2 brokerage accounts. I transferred in kind between them and closed one. Cost basis was maintained and there were no problems.water2357 wrote: ↑Sun May 29, 2022 12:46 am Has anyone had both a Vanguard Mutual Fund Account and a Vanguard Brokerage Account at the time they "upgraded" their Mutual Fund Account to a Brokerage Account as Vanguard has been requesting?
If so, what happened when you "upgraded" the Mutual Fund Account? Did you end up with two separate Brokerage Accounts? Or did Vanguard simply take your Mutual Funds and transfer them in kind to your existing Brokerage Account? Or something else?
And in all these transfers, did Vanguard maintain the correct cost basis on the Mutual Funds that they transferred to the new Brokerage Account or the existing Brokerage Account?
Thanks for any help in understanding what to expect in transistioning a Mutual Fund Account, when a Brokerage Account already exists.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I just called them and asked them to move all the MFs from the MF to the brokerage. It was simple.
Stay hydrated; don't sweat the small stuff
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I did it online while speaking with a rep to make sure that nothing went awry...and as you say, there was no drama. Wish I had done it earlier rather than having agonized over it.
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
It was pretty simple. Actually doing it was a few clicks online. I figured it was inevitable, so I waited for a calm time in my financial and personal life and did it.
The presentation online and in my printed mailed statements (why yes I want them) did not change much. The old-style fund-number-hyphen-account-number-staring-in-9 account numbers on the funds changed to new-style eight-digit account numbers.
The only change that actually affected me was that my automatic monthly RMD service, which I had configured to pay on the first of the month, changed to the 15th of the month. The brokerage platform doesn't support choice of day. I don't mean to imply that was a big deal. I harrumphed and moved on.
Nothing to be afraid of IMHO. That doesn't mean I like it.
The presentation online and in my printed mailed statements (why yes I want them) did not change much. The old-style fund-number-hyphen-account-number-staring-in-9 account numbers on the funds changed to new-style eight-digit account numbers.
The only change that actually affected me was that my automatic monthly RMD service, which I had configured to pay on the first of the month, changed to the 15th of the month. The brokerage platform doesn't support choice of day. I don't mean to imply that was a big deal. I harrumphed and moved on.
Nothing to be afraid of IMHO. That doesn't mean I like it.
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
If I recall correctly, the choice to reinvest dividends had to be re-established
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Yes.
I ended up with one brokerage account. All mutual funds were transferred in-kind to the existing brokerage account.
Yes. I verified this.
Make an explicit cost basis method election (fund/security level) before transferring. When the transfer is done, review that the election is still in effect in. And make the election at the (brokerage) account level as well.
Review and re-establish (if necessary) external bank accounts.
Review and re-establish (if necessary) dividend and capital gain distribution elections. As noted elsewhere, with a brokerage account you can't elect to redirect distributions to another fund.
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I don't even remember. I think I just got a notice that it was time to do it. Somehow, I got the impression that it was going to happen anyway but (for some reason) it would be best to get it done at the time I got the notice. I did not notice anything that made a difference to me.
My inclination is to get things done right away to minimize things that are pending. Thia way there are fewer surprises later on. I must have had to at least change the account numbers in my spreadsheet.
My inclination is to get things done right away to minimize things that are pending. Thia way there are fewer surprises later on. I must have had to at least change the account numbers in my spreadsheet.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I had both a Vanguard Mutual Fund Account and a Vanguard Brokerage Account plus an IRA account and was encouraged 3 years ago to merge the MF account into the brokerage account. I was a bit nervous but did it anyway. Seems like a no brainer now and I appreciate the simplicity of having fewer accounts.
All we want are the facts...
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Any time there is a major account change like this it is worth checking all account attributes (reinvestment, beneficiary, cost basis election).TheGreyingDuke wrote: ↑Sun May 29, 2022 7:47 am If I recall correctly, the choice to reinvest dividends had to be re-established
Years ago we changed our joint account from JtWROS to TIC and I had to re-do all the reinvestment options on all the funds.
Stay hydrated; don't sweat the small stuff
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Years ago I had both types of taxable and tIRA accounts. The conversion itself gave me two brokerage accounts for each. The next step was to just transfer assets from one to the other to consolidate. Agree with comments from other to check all account settings (reinvestment, beneficiary, etc) and cost basis once you’re done. You may also need to reestablish check writing if you have it. No major issues for me but as I recall I did need to tweak a couple of reinvestment options to get it back where I wanted.
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Thanks for the replies. It sounds like if you use the "upgrade" button on the account webpage that you will end up with a second brokerage account, the second one holding what had been in the mutual fund account.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I don't think it's a foregone conclusion that you will end up with a second account - see my earlier reply where I reported the in-kind transfer going to my existing account.water2357 wrote: ↑Mon May 30, 2022 2:13 am Thanks for the replies. It sounds like if you use the "upgrade" button on the account webpage that you will end up with a second brokerage account, the second one holding what had been in the mutual fund account.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
I didn't do anything special to make that happen.
Option 1) call Vanguard to do the upgrade
Option 2) do it online and if you end up with two accounts just transfer the assets from one account to the other
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
When I did this many years ago, I had both a taxable mutual fund account and an old-format taxable brokerage account with identical registration. After the migration, these two accounts were combined into a merged new format brokerage account -- a net reduction of one account with Vanguard. Same for other family members. Fewer accounts is better.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
It's been a long tie so not sure whether it was necessary to call or not. However, no paperwork and no medallion or notarized signature was required. Just FYI, the names on accounts were identical and the requirements might be different if this is not the case.water2357 wrote: ↑Mon May 30, 2022 2:13 am Thanks for the replies. It sounds like if you use the "upgrade" button on the account webpage that you will end up with a second brokerage account, the second one holding what had been in the mutual fund account.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
There was an online option for me. I was offered the option of adding a brand new brokerage account, or using the existing brokerage account that was created in a prior year to hold some inherited stocks. I used the existing brokerage account.
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
When I rolled my 401(k) to an IRA, they created a brokerage IRA separate from the existing MF IRA for the rollover. Later, I just called them up and said, please move all this stuff in "Traditional IRA" to the brokerage account and they did that. No paper authorization, signature guarantee or anything.BigJohn wrote: ↑Mon May 30, 2022 7:54 amIt's been a long tie so not sure whether it was necessary to call or not. However, no paperwork and no medallion or notarized signature was required. Just FYI, the names on accounts were identical and the requirements might be different if this is not the case.water2357 wrote: ↑Mon May 30, 2022 2:13 am Thanks for the replies. It sounds like if you use the "upgrade" button on the account webpage that you will end up with a second brokerage account, the second one holding what had been in the mutual fund account.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
That is my plan for the joint MF account in taxable but I have simply been dragging my feet because I think it would take getting us both on the phone with the VG rep to make it happen. I seem to always find something more fun to do with my time. One of these days I will just knuckle under and get it done. I prefer the simpler tax reporting. But in the scheme of things, I could live with either platform since our needs are fairly simple.
Stay hydrated; don't sweat the small stuff
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Suggest you start the process without going all the way through with it; just don't click the final "Submit" or whatever button it is if you're not comfortable.
1. Login to your Vanguard account.
2. Browse to the Upgrade mutual fund account page. You'll see this:
(Despite it saying they'll open a new account, I don't think that's necessarily so. My guess is Vanguard assumed the primary "use case" for this page is for people who don't have a brokerage account yet, so they didn't bother to customize the message.)
3. Click the Continue button and see what happens.
4. Share your experience here and enjoy the acclaim of your fellow Bogleheads!
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
For those who opened a brokerage account with VG, did you all go through No. 2 of the instructions (above) to "Review and e-sign"? Or were you asked to consent and sign at any other point?sycamore wrote: ↑Mon May 30, 2022 1:09 pmSuggest you start the process without going all the way through with it; just don't click the final "Submit" or whatever button it is if you're not comfortable.
1. Login to your Vanguard account.
2. Browse to the Upgrade mutual fund account page. You'll see this:
(Despite it saying they'll open a new account, I don't think that's necessarily so. My guess is Vanguard assumed the primary "use case" for this page is for people who don't have a brokerage account yet, so they didn't bother to customize the message.)
3. Click the Continue button and see what happens.
4. Share your experience here and enjoy the acclaim of your fellow Bogleheads!
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I started the process on my own...but I felt uncertain about the way certain things were worded, so, since I had time, I called and had a rep on the line while I went through the process. It worked out fine, and I did do the "e-sign" along the way. (This was a week or two ago.)
There were no issues that I have found in the wake of the switch. Share balances, basis, banking info was all correct. I verified with the rep that my ability to act as an authorized agent on behalf of my wife was still active and they made sure to ensure that it was. (For which I received confirmation.)
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Things may have changed but it did not require getting both of us on the phone back them even though it was a joint account. Could be because I had full agent authorization on my wife’s accounts, not sure.jebmke wrote: ↑Mon May 30, 2022 10:43 amWhen I rolled my 401(k) to an IRA, they created a brokerage IRA separate from the existing MF IRA for the rollover. Later, I just called them up and said, please move all this stuff in "Traditional IRA" to the brokerage account and they did that. No paper authorization, signature guarantee or anything.BigJohn wrote: ↑Mon May 30, 2022 7:54 amIt's been a long tie so not sure whether it was necessary to call or not. However, no paperwork and no medallion or notarized signature was required. Just FYI, the names on accounts were identical and the requirements might be different if this is not the case.water2357 wrote: ↑Mon May 30, 2022 2:13 am Thanks for the replies. It sounds like if you use the "upgrade" button on the account webpage that you will end up with a second brokerage account, the second one holding what had been in the mutual fund account.
So, is there an option online where you could have the mutual funds from the mutual fund account transferred "in kind" to the original brokerage account that holds stocks,etc.?
Or do you need to call Vanguard and have them transfer the mutual funds "in kind" from the mutual fund account to the original brokerage account?
In other words what is the best way to get the mutual funds "in kind" from the mutual fund account into the original brokerage account, since there is no need for two taxable brokerage accounts?
And is there any need for e.g. medallion signature guarantees or similar to accomplish this?
Thanks.
That is my plan for the joint MF account in taxable but I have simply been dragging my feet because I think it would take getting us both on the phone with the VG rep to make it happen. I seem to always find something more fun to do with my time. One of these days I will just knuckle under and get it done. I prefer the simpler tax reporting. But in the scheme of things, I could live with either platform since our needs are fairly simple.
In any case, I agree there is a lot more fun stuff to do that this in retirement
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
As others have recommended, make sure you check ALL of your settings and preferences once the conversion is complete.
The major disappointment for me was that, despite the claim that they were YTD, the monthly statements only covered the transactions from the previous month, which means that to have a complete YTD record, you need to keep 12 monthly "YTD" statements.
Under the old system, the YTD statement was, in fact, a YTD record of all transactions up to that point, so you only had to keep the latest month's YTD statement. Makes absolutely no sense to me to call a monthly statement a YTD statement, forcing us to have to keep 12 monthly statements rather than just the last one of the year.
The major disappointment for me was that, despite the claim that they were YTD, the monthly statements only covered the transactions from the previous month, which means that to have a complete YTD record, you need to keep 12 monthly "YTD" statements.
Under the old system, the YTD statement was, in fact, a YTD record of all transactions up to that point, so you only had to keep the latest month's YTD statement. Makes absolutely no sense to me to call a monthly statement a YTD statement, forcing us to have to keep 12 monthly statements rather than just the last one of the year.
Best Regards - Mel |
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Again, thanks for the replies and posting the first page of the conversion process.
Is that employment question, basically "are you employed" and "where", which is what banks seem to have to ask now every time you open a new account?
Do any funds in a mutual fund account Federal Money Market Fund move directly to the settlement fund? In other words, you don't end up with a settlement fund and a second Federal Money Market Fund, do you?
I work more with a brokerage IRA account (generally no tax reporting) than the taxable brokerage account, so please bear with me if these are obvious to you. But how will Vanguard Brokerage report the sales/redemption of securities that generate zero gain/loss?
E.g. if you have multiple purchases and sales of a Money Market Fund or even the settlement fund, are they reporting every sale/redemption on a 1099 each year?
E.g. if you have CDs that were bought at original issue and held to maturity and generate no gain/loss is the redemption at maturity reported on the 1099?
Just wondering if there will potentially be more reporting on Federal Income Tax Schedule D with the brokerage account. Vanguard does not report momey market sales in a mutual fund account on a 1099, at least not that I've seen.
Is that employment question, basically "are you employed" and "where", which is what banks seem to have to ask now every time you open a new account?
Do any funds in a mutual fund account Federal Money Market Fund move directly to the settlement fund? In other words, you don't end up with a settlement fund and a second Federal Money Market Fund, do you?
I work more with a brokerage IRA account (generally no tax reporting) than the taxable brokerage account, so please bear with me if these are obvious to you. But how will Vanguard Brokerage report the sales/redemption of securities that generate zero gain/loss?
E.g. if you have multiple purchases and sales of a Money Market Fund or even the settlement fund, are they reporting every sale/redemption on a 1099 each year?
E.g. if you have CDs that were bought at original issue and held to maturity and generate no gain/loss is the redemption at maturity reported on the 1099?
Just wondering if there will potentially be more reporting on Federal Income Tax Schedule D with the brokerage account. Vanguard does not report momey market sales in a mutual fund account on a 1099, at least not that I've seen.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Mmf/settlement redemptions are not reported, but their interest iswater2357 wrote: ↑Tue May 31, 2022 12:49 am Again, thanks for the replies and posting the first page of the conversion process.
Is that employment question, basically "are you employed" and "where", which is what banks seem to have to ask now every time you open a new account?
Do any funds in a mutual fund account Federal Money Market Fund move directly to the settlement fund? In other words, you don't end up with a settlement fund and a second Federal Money Market Fund, do you?
I work more with a brokerage IRA account (generally no tax reporting) than the taxable brokerage account, so please bear with me if these are obvious to you. But how will Vanguard Brokerage report the sales/redemption of securities that generate zero gain/loss?
E.g. if you have multiple purchases and sales of a Money Market Fund or even the settlement fund, are they reporting every sale/redemption on a 1099 each year?
E.g. if you have CDs that were bought at original issue and held to maturity and generate no gain/loss is the redemption at maturity reported on the 1099?
Just wondering if there will potentially be more reporting on Federal Income Tax Schedule D with the brokerage account. Vanguard does not report momey market sales in a mutual fund account on a 1099, at least not that I've seen.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
When I asked last year, VG said that Federal Money Market Fund would remain and need to be manually consolidated into the settlement fund after the platform transition of the account.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
@Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
Last edited by Tulip on Tue Jul 05, 2022 8:05 pm, edited 1 time in total.
- Mel Lindauer
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Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
To be honest, I was initially dragged, kicking and screaming by my Flagship Rep. I didn't change my holdings or do trading after the conversion.Tulip wrote: ↑Tue May 31, 2022 8:28 pmIs there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...Mel Lindauer wrote: ↑Mon May 30, 2022 10:53 pm As others have recommended, make sure you check ALL of your settings and preferences once the conversion is complete.
The major disappointment for me was that, despite the claim that they were YTD, the monthly statements only covered the transactions from the previous month, which means that to have a complete YTD record, you need to keep 12 monthly "YTD" statements.
Under the old system, the YTD statement was, in fact, a YTD record of all transactions up to that point, so you only had to keep the latest month's YTD statement. Makes absolutely no sense to me to call a monthly statement a YTD statement, forcing us to have to keep 12 monthly statements rather than just the last one of the year.
However, I now buy and ladder Treasuries via my VG brokerage account, so it's not all a lost cause.
Best Regards - Mel |
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Semper Fi
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
A positive thing that happened when I changed to the brokerage accounts is that suddenly my 403(b) account was accounted for as *my money* rather than *my company's money*. This qualified me for Flagship status, which was then promptly devalued to nothing by Vanguard. So in the end I have seen seen no difference at all. Have a great day!
Like good comrades to the utmost of their strength, we shall go on to the end. -- Winston Churchill
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Yes, my Flagship status use to mean something... our own Flagship rep and access to investing seminars. That all went by the wayside around the time they discontinued our free access to Turbo Tax for calculating taxes. And then they introduced the so called "upgrade" to Brokerage Accounts, which I do not view as an improvement...tooluser wrote: ↑Tue May 31, 2022 11:01 pm A positive thing that happened when I changed to the brokerage accounts is that suddenly my 403(b) account was accounted for as *my money* rather than *my company's money*. This qualified me for Flagship status, which was then promptly devalued to nothing by Vanguard. So in the end I have seen seen no difference at all. Have a great day!
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Ok, so sounds like the money market fund trades/exchanges are treated the same in the brokerage account as in the mutual fund account, and that the mutual fund account Federal Money Market will appear in the brokerage account as a separate investment, not in the settlement fund.
Has anyone seen how the taxable brokerage account deals with redemptions of original issue CDs at maturity with no gain or loss? I'm guessing these will appear on the 1099 as a "sale", even though banks don't report original issue CD redemptions on a 1099. So, is this correct for CDs in a taxable Vanguard Brokerage Account, i.e. they will need to be reported on Federal Tax Return Schedule D?
Thanks again.
Has anyone seen how the taxable brokerage account deals with redemptions of original issue CDs at maturity with no gain or loss? I'm guessing these will appear on the 1099 as a "sale", even though banks don't report original issue CD redemptions on a 1099. So, is this correct for CDs in a taxable Vanguard Brokerage Account, i.e. they will need to be reported on Federal Tax Return Schedule D?
Thanks again.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I transfered in 2020. I love the consolidated 1099Div. My problem is with my 1099R for Roth IRA distributions. For tax year 2020 I got a 1099R from mutual fund side with a Q for line 7 which is correct. The 1099R from my brokerage acct had a T which is incorrect. Vanguard corrected when I brought it to their attention. For tax year 2021 my 1099R had a T code which took 2 corrections before I got a 1099R with the correct code Q for line 7. I have received monthly qualified distributions for my Roth IRA since 2015 and always received a correct 1099R until my transfer to brokerage.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Thanks for the information on issues with the tax reporting on the Roth IRA distributions. I've done conversions from traditional to Roth in those brokerage accounts which were reported correctly, but nothing out of the Roth.
Can anyone verify the tax reporting on the 1099 for maturing original issue CDs in a taxable brokerage account? Do the proceeds have to be reported on Federal Income Tax Schedule D, even though there is no gain/loss?
Can anyone verify the tax reporting on the 1099 for maturing original issue CDs in a taxable brokerage account? Do the proceeds have to be reported on Federal Income Tax Schedule D, even though there is no gain/loss?
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
For the first time since the switch to brokerage, I tried to make an investment in one of my funds. I was not able to invest directly to the fund but had to have the funds available in the settlement account. Does this mean the funds must be available at the start of the transfer and I can't transfer online from my bank as I have always done, since that would take days? I assume I can just transfer from my money market and check to see that it is already in the settlement fund before I start the transfer. Is this the way it works now or did I misunderstand?
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I realize you targeted this to Mel, but I can confidently claim that the main benefit of the mutual fund platform is NOT that it encourages buy-and-hold.Tulip wrote: ↑Tue May 31, 2022 8:28 pm @Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
I have a brokerage account (well 4, taxable, IRA, Roth IRA, and a second taxable that was created as part of an ACATS that I now use to hold my Treasury ladder); I buy and hold. I don't feel the temptation to day trade. (In fact, Vanguard's brokerage platform isn't really set up for that anyway.)
In the context of the transition, the primary benefit is that Vanguard wants to kill the mutual fund platform.
Other benefits: you can hold anyone's ETFs, many different mutual funds, and Treasuries.
You do lose some features, mostly around automatic cross-fund dividend reinvestment and consolidated statements.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I would argue also that the tax reporting is a bit simpler inasmuch as dividends for all assets in the brokerage account are reported as one entry on Schedule B.exodusNH wrote: ↑Fri Jul 21, 2023 5:17 pmI realize you targeted this to Mel, but I can confidently claim that the main benefit of the mutual fund platform is NOT that it encourages buy-and-hold.Tulip wrote: ↑Tue May 31, 2022 8:28 pm @Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
I have a brokerage account (well 4, taxable, IRA, Roth IRA, and a second taxable that was created as part of an ACATS that I now use to hold my Treasury ladder); I buy and hold. I don't feel the temptation to day trade. (In fact, Vanguard's brokerage platform isn't really set up for that anyway.)
In the context of the transition, the primary benefit is that Vanguard wants to kill the mutual fund platform.
Other benefits: you can hold anyone's ETFs, many different mutual funds, and Treasuries.
You do lose some features, mostly around automatic cross-fund dividend reinvestment and consolidated statements.
Stay hydrated; don't sweat the small stuff
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
I am currently still holding my four taxable and one IRA funds in legacy platform Mutual Fund Accounts (not Brokerage). Received a letter today from Vanguard stating that beginning in Sept 2023 I will now be charged an account service fee of $25 for each fund holding for a total of $125.
I currently have all dividends reinvested in my Federal Money Market Fund account. Will I still be able to do this if I transfer to a Brokerage account?
I currently have all dividends reinvested in my Federal Money Market Fund account. Will I still be able to do this if I transfer to a Brokerage account?
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
yesTulip wrote: ↑Fri Jul 21, 2023 7:06 pm I am currently still holding my four taxable and one IRA funds in legacy platform Mutual Fund Accounts (not Brokerage). Received a letter today from Vanguard stating that beginning in Sept 2023 I will now be charged an account service fee of $25 for each fund holding for a total of $125.
I currently have all dividends reinvested in my Federal Money Market Fund account. Will I still be able to do this if I transfer to a Brokerage account?
Stay hydrated; don't sweat the small stuff
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Yes because the settlement account is Federal Money Market Fund.Tulip wrote: ↑Fri Jul 21, 2023 7:06 pm I am currently still holding my four taxable and one IRA funds in legacy platform Mutual Fund Accounts (not Brokerage). Received a letter today from Vanguard stating that beginning in Sept 2023 I will now be charged an account service fee of $25 for each fund holding for a total of $125.
I currently have all dividends reinvested in my Federal Money Market Fund account. Will I still be able to do this if I transfer to a Brokerage account?
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
How would you calculate the percentage of dividends attributed to U.S. Government obligations, which impacts state taxes, and would be different for each fund held in a brokerage account? You’d still have to separate everything out and calculate each fund’s contribution before adding them back together, wouldn’t you?jebmke wrote: ↑Fri Jul 21, 2023 5:22 pmI would argue also that the tax reporting is a bit simpler inasmuch as dividends for all assets in the brokerage account are reported as one entry on Schedule B.exodusNH wrote: ↑Fri Jul 21, 2023 5:17 pmI realize you targeted this to Mel, but I can confidently claim that the main benefit of the mutual fund platform is NOT that it encourages buy-and-hold.Tulip wrote: ↑Tue May 31, 2022 8:28 pm @Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
I have a brokerage account (well 4, taxable, IRA, Roth IRA, and a second taxable that was created as part of an ACATS that I now use to hold my Treasury ladder); I buy and hold. I don't feel the temptation to day trade. (In fact, Vanguard's brokerage platform isn't really set up for that anyway.)
In the context of the transition, the primary benefit is that Vanguard wants to kill the mutual fund platform.
Other benefits: you can hold anyone's ETFs, many different mutual funds, and Treasuries.
You do lose some features, mostly around automatic cross-fund dividend reinvestment and consolidated statements.
Steve
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Thank you... good to know that Federal Money Market Fund is used as the settlement account when transitioning to a Brokerage account.
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
In a brokerage account, there's a single consolidated 1099 document. It has the totals as well as the contribution to DIV, INT, etc. by the funds you owned. In the back of it, Vanguard provides a breakdown of details like USGO per fund. No need to add them back together.Longdog wrote: ↑Sat Jul 22, 2023 4:08 pmHow would you calculate the percentage of dividends attributed to U.S. Government obligations, which impacts state taxes, and would be different for each fund held in a brokerage account? You’d still have to separate everything out and calculate each fund’s contribution before adding them back together, wouldn’t you?jebmke wrote: ↑Fri Jul 21, 2023 5:22 pmI would argue also that the tax reporting is a bit simpler inasmuch as dividends for all assets in the brokerage account are reported as one entry on Schedule B.exodusNH wrote: ↑Fri Jul 21, 2023 5:17 pmI realize you targeted this to Mel, but I can confidently claim that the main benefit of the mutual fund platform is NOT that it encourages buy-and-hold.Tulip wrote: ↑Tue May 31, 2022 8:28 pm @Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
I have a brokerage account (well 4, taxable, IRA, Roth IRA, and a second taxable that was created as part of an ACATS that I now use to hold my Treasury ladder); I buy and hold. I don't feel the temptation to day trade. (In fact, Vanguard's brokerage platform isn't really set up for that anyway.)
In the context of the transition, the primary benefit is that Vanguard wants to kill the mutual fund platform.
Other benefits: you can hold anyone's ETFs, many different mutual funds, and Treasuries.
You do lose some features, mostly around automatic cross-fund dividend reinvestment and consolidated statements.
With mutual fund accounts, you would have the same info (assuming Vanguard provides it -- it's been years since I had such an account) but you'd just have to look across multiple documents.
The main advantage of a brokerage 1099 that jebmke referred to is that many investors would only need to enter the summary/total values in a single 1099 in your tax software. With mutual fund-only accounts you'd have to enter the details of each 1099 separately (technically each 1099 is from a separate payer/mutual fund). Although I'm sure some taxpayers just add them all up and report the total
Re: Vanguard Mutual Fund Acct and Vanguard Brokerage Acct -- What happens when you Upgrade Mutual to Brokerage?
Yes, my Treasury index fund is 100% normally, I think. So I just use that number. That the same as what I have to do with our MF account as well. So I add both of them for the state adjustmentLongdog wrote: ↑Sat Jul 22, 2023 4:08 pmHow would you calculate the percentage of dividends attributed to U.S. Government obligations, which impacts state taxes, and would be different for each fund held in a brokerage account? You’d still have to separate everything out and calculate each fund’s contribution before adding them back together, wouldn’t you?jebmke wrote: ↑Fri Jul 21, 2023 5:22 pmI would argue also that the tax reporting is a bit simpler inasmuch as dividends for all assets in the brokerage account are reported as one entry on Schedule B.exodusNH wrote: ↑Fri Jul 21, 2023 5:17 pmI realize you targeted this to Mel, but I can confidently claim that the main benefit of the mutual fund platform is NOT that it encourages buy-and-hold.Tulip wrote: ↑Tue May 31, 2022 8:28 pm @Mel Lindauer...
Is there a good reason why you switched from a Mutual Fund Account to a Brokerage Account? You espouse buying and holding a simple 3-Fund portfolio. Yet the main advantage of a Brokerage Account is the ease of frequent and diverse trading... which seems like a contradiction to what you teach...
I have a brokerage account (well 4, taxable, IRA, Roth IRA, and a second taxable that was created as part of an ACATS that I now use to hold my Treasury ladder); I buy and hold. I don't feel the temptation to day trade. (In fact, Vanguard's brokerage platform isn't really set up for that anyway.)
In the context of the transition, the primary benefit is that Vanguard wants to kill the mutual fund platform.
Other benefits: you can hold anyone's ETFs, many different mutual funds, and Treasuries.
You do lose some features, mostly around automatic cross-fund dividend reinvestment and consolidated statements.
Stay hydrated; don't sweat the small stuff