Author Topic: Tax Loss Harvesting  (Read 1988 times)

boarder42

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Tax Loss Harvesting
« on: February 20, 2015, 12:42:49 PM »
So i have a vangauard account now.  I moved over from etrade.

need a bit of understanding on how it works over there.  So market tanks ... i swap my taxable shares of VTIAX for the S&P 500 Index admiral.  does this count as a sale and purchase?  and how long before i can go back the other way to avoid a wash sale? ie 2008 when the market just kept going down. If VTIAX and the S&P 500 index arent far enough apart to not be a wash sale... then i guess i just go to an international total SM ... and then adjust my tax advantaged accounts to keep my allocation correct?

Gone Fishing

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Re: Tax Loss Harvesting
« Reply #1 on: February 20, 2015, 01:04:38 PM »
I'm interested in this, too.  Seems like tax loss harvesting would almost be the opposite of traditional rebalancing and would require a little dancing to maintain proper asset allocations given the rules.

MDM

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Re: Tax Loss Harvesting
« Reply #2 on: February 20, 2015, 03:01:32 PM »
From http://www.bogleheads.org/wiki/Wash_sale: "Two funds tracking different indexes, or an index fund and an actively managed fund in the same asset class, should not be substantially identical, though there is no definitive IRS ruling."

Also see http://www.forbes.com/sites/baldwin/2012/06/05/wash-sale-trap-what-is-substantially-identical and http://fairmark.com/capgain/wash/wsident.htm.

brooklynguy

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Re: Tax Loss Harvesting
« Reply #3 on: February 20, 2015, 03:09:36 PM »
Also, keep in mind that while the holding period for the wash sale rules is 30 days, Vanguard's frequent trading policy will require you to wait 60 days before moving back into the original fund (but, if you really want to, you can get around this longer restriction by submitting your exchange request by mail instead of doing it online).  See here for details:  https://personal.vanguard.com/us/whatweoffer/overview/redemptionpolicy

johnny847

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Re: Tax Loss Harvesting
« Reply #4 on: February 20, 2015, 04:06:24 PM »
Also, keep in mind that while the holding period for the wash sale rules is 30 days, Vanguard's frequent trading policy will require you to wait 60 days before moving back into the original fund (but, if you really want to, you can get around this longer restriction by submitting your exchange request by mail instead of doing it online).  See here for details:  https://personal.vanguard.com/us/whatweoffer/overview/redemptionpolicy
You can also get around this restriction by doing a "one shot" scheduled transfer. I've done it before. Not sure if Vanguard still lets you do it, but I doubt they've changed their policy considering Vanguard reps were apparently okay with this. http://www.bogleheads.org/wiki/Frequent_trading_policy#Setting_up_a_one-shot_automatic_transfer