After doing a lot of researching in this forum and others, it seems I still have some questions about TLH. I have my taxable account at Vanguard, both myself and wife’s Roth IRA @ Vanguard. My 401k offers Schwab Index funds; my wife’s 401k offers Vanguard index funds, HSA (soon to be invested). Here is what I have learned
1) Do I need to worry about 401k triggering Wash sale rules? –No clear answer from IRS, but probably would consider it to be on the safe side
2) Do I need to worry about HSA triggering wash sale rule? –Once again no clear answer, but probably would consider it to be on the safe side
3) What constitutes substantially identical? –an ETF with corresponding mutual fund would be considered substantially identical.
4) What precautions should I have to avoid Wash sale rule?- in taxable account turn off automatic reinvestment of dividends and sweep them to money market to manually be reinvested. In retirement accounts turn off automatic reinvestments.
My questions I have not figured out yet
My main problem is I want to be heavily invested in VTSAX in taxable. I also want to hold it in my wife’s 401k as there are no other good options. Additionally I have VG S&P 500 VFIAX in taxable and Schwab S&P 500 SWPPX in my 401k with not a whole lot of good options. If I am unable to stop auto reinvesting in 401ks I am weary I would be in violation of Wash sale rule. I am emailing both 401k companies (CMC interactive and Lincoln financial group) but have not heard back. Thanks for any help!!
1) Do I need to worry about 401k triggering Wash sale rules? –No clear answer from IRS, but probably would consider it to be on the safe side
2) Do I need to worry about HSA triggering wash sale rule? –Once again no clear answer, but probably would consider it to be on the safe side
3) What constitutes substantially identical? –an ETF with corresponding mutual fund would be considered substantially identical.
4) What precautions should I have to avoid Wash sale rule?- in taxable account turn off automatic reinvestment of dividends and sweep them to money market to manually be reinvested. In retirement accounts turn off automatic reinvestments.
My questions I have not figured out yet
- Can an index fund from different companies be considered substantially identical? For example Schwab S&P 500 (SWPPX) and Vanguard S&P 500 VFIAX
- How do I know if a fund tracks the same index? Where do I find the index a certain fund tracks aside from the title/name of the index fund?
- In 401k accounts is it even possible to turn off automatic dividend reinvestment? I have not seen that option on either of our 401k websites
My main problem is I want to be heavily invested in VTSAX in taxable. I also want to hold it in my wife’s 401k as there are no other good options. Additionally I have VG S&P 500 VFIAX in taxable and Schwab S&P 500 SWPPX in my 401k with not a whole lot of good options. If I am unable to stop auto reinvesting in 401ks I am weary I would be in violation of Wash sale rule. I am emailing both 401k companies (CMC interactive and Lincoln financial group) but have not heard back. Thanks for any help!!
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