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Tax loss harvesting - avoiding a wash sell

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  • Tax loss harvesting - avoiding a wash sell

    I understand that if you have an asset that loses value (eg VTI) and you sell it (banking a loss) and then the same day purchase “not substantially identical” IWM [ishares Russell 2000], then for the next 30 days I cannot buy VTI or that would be a wash transaction.

    My question: I have 3 different brokerage accounts at vanguard. Do I need to avoid buying VTI ONLY in the brokerage account that I sold or all accounts?




  • #2
    all

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    • #3
      Yes and spouse

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      • #4
        and your IRAs too

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        • #5
          Excellent, thanks. This is harder than it looks. I need to change my dividends from re-invest too

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          • #6
            Originally posted by runfast00 View Post
            Excellent, thanks. This is harder than it looks. I need to change my dividends from re-invest too
            Right that helps for sure

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            • #7
              Originally posted by runfast00 View Post
              Excellent, thanks. This is harder than it looks. I need to change my dividends from re-invest too
              It isn't hard but you do have to pay attention.

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              • #8
                How do you know what the irs counts as substantially identical?

                would VGTSX vanguard total international and FTIHX fidelity total international create a wash sale?

                I don’t think so because VG tracks FTSE global all cap ex us index and fidelity tracks MSCI ACWI ex US investable market index?? Is that the right way to think about it? Or are those too closely linked?

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                • #9
                  Originally posted by mamaham View Post
                  How do you know what the irs counts as substantially identical?

                  would VGTSX vanguard total international and FTIHX fidelity total international create a wash sale?

                  I don’t think so because VG tracks FTSE global all cap ex us index and fidelity tracks MSCI ACWI ex US investable market index?? Is that the right way to think about it? Or are those too closely linked?
                  IRS has left it vague. I sell and buy ETFs with a high correlation but track different index.

                  https://www.schwab.com/resource-cent...-on-wash-sales

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                  • #10
                    Originally posted by runfast00 View Post
                    Excellent, thanks. This is harder than it looks. I need to change my dividends from re-invest too
                    Many do have their dividends sent to a sweep account, but you don't have to do so. Just look at the dividend and make sure it won't pay in the next 30 days.

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                    • #11
                      As mentioned: yourself and (spouse if applicable) in all brokerage/retirement accounts need to avoid wash-sale trigger. As of now I’ve seen target benchmarks considered ‘differentiated’ enough (e.g. CRISP Index vs S&P 500). The combination of balancing cross-account avoidance of wash-sale triggers, time/ability to systematically harvest losses & research/selection of primary/secondary portfolio funds have been what clients increasingly cite as value created by the robo offering we offer.
                      Founder, Coastal Wealth Planners- Fiduciary Tax-Sensitive Retirement Planning & Wealth Management www.coastal-wp.com email: [email protected]

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