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Learning, Sharing, and Teaching => Investor Alley => Topic started by: bpage12 on April 25, 2019, 08:31:47 AM

Title: How does selling shares in a Roth work?
Post by: bpage12 on April 25, 2019, 08:31:47 AM
I have 250 shares of VTIAX (International index fund) and would like to sell those and get more VTSAX.  How does selling in a Roth work?
Title: Re: How does selling shares in a Roth work?
Post by: Enigma on April 25, 2019, 08:34:26 AM
Within Vanguard I can usually bring the holdings up and then find VTIAX -> Transact -> Exchange
Title: Re: How does selling shares in a Roth work?
Post by: Spitfire on April 25, 2019, 03:04:14 PM
Yeah you should be able to exchange them pretty easily in the account. No tax consequences for the exchange within a Roth. You may be unable to buy into the same fund you sold out of for a couple months.
Title: Re: How does selling shares in a Roth work?
Post by: wageslave23 on April 25, 2019, 03:39:40 PM
Everything you do in a Roth is tax free anyways as long as you don't take a distribution
Title: Re: How does selling shares in a Roth work?
Post by: bpage12 on April 26, 2019, 05:12:11 AM
That all sounds great but if I sell those international shares that I bought years ago and exchange them for VTSAX will it count against my $6,000 contribution for this year?
Title: Re: How does selling shares in a Roth work?
Post by: FindingFI on April 26, 2019, 05:28:22 AM
No, it won't count towards the $6,000 contributions limit. That limit is for new money coming into the account only, not trading of shares that are already in there.
Title: Re: How does selling shares in a Roth work?
Post by: talltexan on April 26, 2019, 07:33:17 AM
I just use my new contributions to buy the thing that's underweight: since my Int'l had lagged my domestic, I put all of last year's money into Int'l to restore my 50-50 allocation.
Title: Re: How does selling shares in a Roth work?
Post by: MustacheAndaHalf on April 26, 2019, 09:17:13 PM
The limit of $6,000 is for taking new money from outside the Roth, and putting it inside the Roth.  When you switch investments within the Roth, the IRS doesn't care (*).  Also for a Roth where you've contributed $6,000, you can remove $6,000 without any tax impact.  It's the growth of that money that has tax implications if you withdraw it before age 59.5.


(*) except if you sell something at a loss elsewhere, and buy it in your Roth - a "wash sale"