Author Topic: Help with TLH  (Read 385 times)

Must Stache

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Help with TLH
« on: December 27, 2018, 03:08:58 PM »
In my taxable account at Vanguard, I hold VTSAX and VTIAX.  During 2018, they have delivered me about $5,000 and $10,000 in dividends, respectively.  Because my VTIAX holding is down at the moment, I could sell enough shares to more than cover the $15K I have earned in dividends from both funds.  Is there an easy way to determine whether or not it makes sense to capture the $15K loss in order to offset the $15K in dividends?  Apologies if this is a silly question as I have never done TLH before and want to make sure I'm thinking about all of this correctly.  Thanks in advance for any input!

walkwalkwalk

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Re: Help with TLH
« Reply #1 on: December 27, 2018, 03:19:59 PM »
Dividends would only be offset by the maximum capital loss of 3k. The rest of the loss (if you do 15k) would carryforward.

Must Stache

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Re: Help with TLH
« Reply #2 on: December 27, 2018, 03:24:09 PM »
Thanks for the quick response.  So do you mean I would still have to pay taxes on $12K of dividends? 

walkwalkwalk

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Re: Help with TLH
« Reply #3 on: December 27, 2018, 03:28:23 PM »
If that's your only other income, no. You have the standard deduction (assuming your single) of 12k which would bring taxable income to 0. If it wasn't your only other income then, yes. But dividends have preferential rates if they are qualified, meaning you held onto it 60 days after the dividend. Selling to create a loss may make some of your dividends not qualified.