Thanks, these are important variables that I didn't consider (i.e. current vs. future tax rates and the gains already realized this tax year). So I guess the question is too open-ended to have a specific answer that always works for everyone.
Search found 7 matches
- Sat Jul 07, 2018 11:34 pm
- Forum: Personal Investments
- Topic: In what order should I sell tax lots during rebalancing?
- Replies: 6
- Views: 1174
Re: In what order should I sell tax lots during rebalancing?
- Sat Jul 07, 2018 8:13 pm
- Forum: Personal Investments
- Topic: In what order should I sell tax lots during rebalancing?
- Replies: 6
- Views: 1174
Re: In what order should I sell tax lots during rebalancing?
Good point. I'm going to update the question to state that C and D have been held longer than 30 days.
- Sat Jul 07, 2018 7:42 pm
- Forum: Personal Investments
- Topic: In what order should I sell tax lots during rebalancing?
- Replies: 6
- Views: 1174
In what order should I sell tax lots during rebalancing?
Say I own an ETF whose asset class is overrepresented in my portfolio. I want to sell some of its shares to bring my portfolio closer to my desired asset allocation. Say I purchased the ETF in 4 tax lots, A, B, C and D, with cost bases of $80, $90, $110 and $120 respectively. Say the ETF is currently trading at $100. (Assume A and B have been held longer than a year and are therefore taxed at the long-term rate. Edit: Assume that C and D have both been held longer than 30 days, so there are no wash sale complications. ) Suppose I intend to keep a position in this ETF long-term. In what order should I sell these tax lots to maximize long-term after-tax portfolio value? I hope there's enough information here to answer the question. I have an ...
- Tue Jun 05, 2018 12:25 pm
- Forum: Personal Investments
- Topic: Why do I have a wash sale disallowance?
- Replies: 12
- Views: 2383
Re: Why do I have a wash sale disallowance?
I am not the OP but I would also like to thank those who responded as I also misunderstood the wash sale rule. Yeah, this is way more complicated than I thought it was. And to explicitly answer this paragraph. The $157 disallowance was already used and should have been deducted from your 2017 income. All these transactions end up on your 2017 tax return. And the increase to your cost basis already happened in 2017. None of this has anything to do with your 2018 taxes. So, no you did not have it right. Thanks for being explicit. Understood! Actually, if the brokerage had used the 9/20 shares, your disallowed loss would have been (63/74) * (594.20 - 445.81) = 126.33. Yikes. My mistake! So then what determines what lot gets chosen for replace...
- Mon Jun 04, 2018 11:13 pm
- Forum: Personal Investments
- Topic: Why do I have a wash sale disallowance?
- Replies: 12
- Views: 2383
Re: Why do I have a wash sale disallowance?
The 63 shares purchased on 11/16 were considered replacement shares for 63 of the shares purchased on 9/22, which were sold less than 30 days after the replacement shares were purchased. The amount disallowed was therefore (63/136) * (1,158.24 - 819.33) = 157.00. If you paid 6.25/sh on 11/16, then, as noted, the 157 was added to the purchase cost. Thanks everyone for your answers! That is some serious accounting sorcery. :twisted: But yes, the arithmetic makes sense to me now and after some head-scratching, so does the intuition. Which broker is this? You kinda want a little better reporting of the whole thing, don't you? My investment advisor is Personal Capital and my brokerage is Pershing LLC. (Side note: I've decided to go full Boglehe...
- Mon Jun 04, 2018 1:04 am
- Forum: Personal Investments
- Topic: Why do I have a wash sale disallowance?
- Replies: 12
- Views: 2383
Why do I have a wash sale disallowance?
Hi! I have a very specific question about wash sale rules. I'm trying to figure out why I have a wash sale disallowance on some trades that my investment advisory firm placed for me. Here's a list of tax lots for the stock (S - Sprint) as reported by my brokerage firm: Quantity Opening Date Opening Cost($) Closing Date Closing Cost($) Disallowance($) 74.00 9/20/2017 594.20 11/30/2017 445.81 0.00 136.00 9/22/2017 1,158.24 11/30/2017 819.33 -157.00 63.00 11/16/2017 550.75 11/30/2017 379.54 0.00 As far as I understand, the only wash sale-related event involves the third lot, bought on 11/16 and sold on 11/30. Why is there a $157 wash sale disallowance on that second lot opened on 09/22? Note that I did not buy the stock again until 2018, defin...
- Sat Jun 02, 2018 5:41 pm
- Forum: Personal Finance (Not Investing)
- Topic: Using PersonalCapital, Mint, etc.... - and fraud concerns
- Replies: 46
- Views: 14992