Author Topic: Good week for swapping to similar funds  (Read 1523 times)


  • Walrus Stache
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Good week for swapping to similar funds
« on: February 09, 2016, 11:37:45 AM »
Taking capital losses is timing the market, but can be better than inaction.  For example, Vanguard Total Stock Market ETF ("VTI") tracks a different index and has twice as many stocks as Schwab US Broad Market ETF ("SCHB").  If you paid more for VTI than today's price, after 31 days you can recognize a tax loss.  You sell VTI for a loss, and your taxes will reflect a deduction for the loss.  Then to avoid being out of the market, you immediately buy the same amount of SCHB.

I think the biggest thing is finding similar pairs of ETFs that roughly match, but avoid the IRS wash sale rule for "substantially identical" assets.  Here's my short list:
VTI ~ SCHB (Vanguard vs Schwab Total Market)
VEA ~ IEFA (Vanguard vs iShares international)
VWO ~ IEMG (Vanguard vs iShares emerging markets)