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What are your tax loss harvesting partners?

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  • #16
    Fees aren't the only concern...

     

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    • #17




      Fees aren’t the only concern…

       
      Click to expand...


      If they're tracking the same index then why shouldn't fees be the only concern?

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      • #18







        Fees aren’t the only concern…

         
        Click to expand…


        If they’re tracking the same index then why shouldn’t fees be the only concern?
        Click to expand...


        3 things matter with index funds- what index, how well it is tracked, and at what expense. Although the last two often have significant effect on each other, they are different. If you use an ETF, other things start mattering too-like volume and spreads. But I agree with the general gist, it's ideal to get back to the original investment since you felt that was best in the first place. If I can't get back to the original investment without a taxable gain, I just hold the investment for a year and then use it for my charitable donations.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #19
          So 30 days later, I cannot get back to the original investment without a taxable gain. So my best bet is to hold it for a year and donate to charity? Is it correct that the reason for this is that I will not have to pay capital gains tax? I will be using these shares for my charitable giving for at least a few years!

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          • #20
            Yes I believe you could do that or just hold until the price drops

            I do like how tlh consolidates the shares in terms of pricing as well

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            • #21




              I’m a wimp, Betterment does it for me.
              Click to expand...


              I have heard many reports that Betterment and other "roboadvisors" do not necessarily get you the most TLH $ vs just doing it yourself.  When you do it yourself, you also get to consider other minor factors such as 1) Am I willing to lose my qualified dividend to TLH again now or should I wait?  2) Am I willing to take a tiny short term gain to get back into a more preferred fund?

              A friend of mine did a little experiment over the last year or so and he booked 50% more TLH $ then Betterment with the same starting account, with not that much effort.  Not sure why, can't say I understand their software or algorithm at all, but I know I trust myself more and I'll also save the small advisory fee.

              Another thing to consider is that you will have to make sure that you do not hold any of the MF/ETFs that Betterment uses (or those that track the same index) in your other retirement or taxable accounts or they will trigger a wash sale.

              In my opinion DIY/Vanguard  >>  Betterment (unless you really have no interest in learning or spending any time at all).

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              • #22
                I've gone to TLH'ing almost completely between Vanguard and Schwab funds, since they have the lowest fees:

                Total Stock Market:  VTI <--> SCHB

                Mid-Cap:  VO <--> SCHM

                Small-Cap:  VB <--> SCHA

                Large Value:  VTV <--> SCHV

                Small Value:  VBR <--> IWN (This is the one I have the most uncertainty about, as I can't find any really low-ER alternatives.  I would do VIOV, but IWN trades commission-free at my broker).

                International:  VEU <--> VEA (I would use VXUS, but those two trade commission-free at my broker).

                International Small-Cap:  VSS <--> SCHC

                Emerging Markets:  VWO <--> SCHE

                To add to WCI's list, it's also important to compare the percent qualified dividends each potential partner distributes.  I haven't looked at this lately, although I may change some partners going forward based on this.

                I also usually stick with one partner until there's a loss, since they're within a couple of basis points of each other.  I try not to have multiple ETFs of the same category in my portfolio, but sometimes if you're only TLH'ing a partial number of higher-cost shares, it becomes unavoidable.

                Where do you guys find information on the quality of an index a fund/ETF tracks?
                I sometimes have trouble reading private messages on the forum. I can also be contacted at [email protected]

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                • #23
                  TLH time!

                  Last week, I harvested a very recent (4 trading days) loss in VTSAX, exchanging to VFIAX. I had the forethought to take screenshots throughout the process, resulting in this educational post. I hope this helps someone who has been leery of attempting tax loss harvesting on their own. Cheers!

                  Tax Loss Harvesting with Vanguard: A Step by Step Guide

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                  • #24
                    Scanning my Wealthfront account:

                    VTI /ITOT / SCHB

                    VB /  SCHA

                    VWO /IEMG / SCHE

                    VEA / IXUS / SCHF

                     

                    At this hour, it's unlikely any TLH opportunity left.

                    @Lithium,   check ETF.COM for ratings.

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                    • #25
                      Following.

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                      • #26
                        A newbee to TLH.

                        Three questions

                        1- How does having the same mutual fund in a tax protected (403b) account affect? Say, I have the Vanguard Total Stock Market Fund in both my taxable and tax protected accounts. Moreover, in the tax protected account, its auto investment every month from my paycheck.

                        Along the same lines,

                        2- Any downsides to making and consolidating mutual funds in my tax protected accounts before I get into TLH. Unless I am missing something, I guess there arent any tax implications, either now or going forward?

                        3- Lastly, in my taxable accounts, I have the dividends reinvested. How does one change that? Do I need to call Vanguard/ Fidleity?

                        Thanks!

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                        • #27




                          A newbee to TLH.

                          Three questions

                          1- How does having the same mutual fund in a tax protected (403b) account affect? Say, I have the Vanguard Total Stock Market Fund in both my taxable and tax protected accounts. Moreover, in the tax protected account, its auto investment every month from my paycheck.

                          Along the same lines,

                          2- Any downsides to making and consolidating mutual funds in my tax protected accounts before I get into TLH. Unless I am missing something, I guess there arent any tax implications, either now or going forward?

                          3- Lastly, in my taxable accounts, I have the dividends reinvested. How does one change that? Do I need to call Vanguard/ Fidleity?

                          Thanks!
                          Click to expand...


                          1. That will create a (partial) wash sale when you invest in the 403(b) after selling a substantially identical fund in taxable for a loss.

                          2. No tax consequences of buying and selling in tax-advantaged accounts. Do as you wish.

                          3. I have a screenshot of exactly that in the post I shared above. With Vanguard, click on "cost basis: then "view / change cost basis method" then use the dropdown to select Specific Identification (SpecId)

                           

                          Good luck!

                          -PoF

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                          • #28
                            If I want to use Betterment just for tax loss harvesting purposes (I typically do Target-date for my funds as I don't want to have to rebalance), how much and what should I be buying at Betterment?

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                            • #29




                              If I want to use Betterment just for tax loss harvesting purposes (I typically do Target-date for my funds as I don’t want to have to rebalance), how much and what should I be buying at Betterment?
                              Click to expand...


                              Assuming you don't have any current taxable accounts.  Betterment selects funds automatically depending on how much bond % you want.  That will depend on your overall asset allocation, risk tolerance etc.

                              https://www.betterment.com/resources/research/etf-portfolio-selection-methodology/?_ga=2.99899422.1474255273.1518719485-1219122317.1518719485&_gac=1.85480811.1518719485.Cj0KCQiA_JTUBRD4ARIsAL7 _VeU4l51MnD9CFhAvP7rG6VfcRD7jkJrNUGxaaT-LHlYL61RWMYadFegaAhQ5EALw_wcB#allocation-chart

                               

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                              • #30
                                I have other taxable accounts (again mostly with Targetdate funds) - does that change things for Betterment?

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