Betterment TLH and TD Ameritrade HSA Trading account Wash

[Icecreamarsenal]

I have some money in Betterment to take advantage of their TLH, and I mistakenly purchased VTI through my pre-tax HSA savings account.
What are the consequences on my tax loss harvesting?

[MustacheAndaHalf]

Is your VTI below it's cost, and was it sold within 30 days of your purchase?

[HAFMAC]

If you're Betterment taxable account sold VTI within 30 days (before or after) your purchase of VTI in your HSA, then the loss you recognized on your VTI sale is not recognized and the loss is used to adjust the basis in the shares of VTI in your HSA.  The problem with that is the loss goes "poof" since you never recognize losses on your HSA - it's tax free. 

[seattlecyclone]

If you're Betterment taxable account sold VTI within 30 days (before or after) your purchase of VTI in your HSA, then the loss you recognized on your VTI sale is not recognized and the loss is used to adjust the basis in the shares of VTI in your HSA.  The problem with that is the loss goes "poof" since you never recognize losses on your HSA - it's tax free. 

The disallowed loss is limited to the number of "replacement shares" that you actually purchased in your HSA. So if Betterment sold 100 shares for a loss but you bought 10 shares in your HSA, you still get to claim the loss for 90 shares.

You'll need to mark the disallowed loss with code "W" on your Form 8949 when you file your taxes next year.