Buy VTSAX today (dividend record date)?
Buy VTSAX today (dividend record date)?
I was about to buy VTSAX this afternoon with a significant of money which just became available.
Then I realized that today (9/22) is dividend record date of VTSAX. I am wondering whether I will get dividend if I buy VTSAX today.
If not, I may buy VFIAX instead.
Then I realized that today (9/22) is dividend record date of VTSAX. I am wondering whether I will get dividend if I buy VTSAX today.
If not, I may buy VFIAX instead.
Re: Buy VTSAX today (dividend record date)?
If you buy mutual fund shares on the record date, then you will get the dividend. Whether you get the dividend or not would not matter if you are buying in a tax-advantaged account and would only matter a little bit in a taxable account.
Last edited by livesoft on Wed Sep 22, 2021 2:11 pm, edited 1 time in total.
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Re: Buy VTSAX today (dividend record date)?
Are you wanting the dividend or not?
You'll never truly lose out on a dividend. The system doesn't work that way. However, some people would rather not pay taxes on a dividend and would rather wait a day for the market price to adjust slightly and buy then.
You'll never truly lose out on a dividend. The system doesn't work that way. However, some people would rather not pay taxes on a dividend and would rather wait a day for the market price to adjust slightly and buy then.
Re: Buy VTSAX today (dividend record date)?
I want to get dividend.dukeblue219 wrote: ↑Wed Sep 22, 2021 2:10 pm Are you wanting the dividend or not?
You'll never truly lose out on a dividend. The system doesn't work that way. However, some people would rather not pay taxes on a dividend and would rather wait a day for the market price to adjust slightly and buy then.
It is in t-IRA. I just do not want to (lose dividend and then next day see the price drop because of dividend payout).
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Re: Buy VTSAX today (dividend record date)?
Most people try to avoid the dividend in taxable as it creates some tax. So buy after the record date. Though as livesoft said, it is not that much tax.
Recently had money to deploy and debated waiting until I wouldn't get the dividend, but decided to buy anyways. In the grand scheme of things missing or getting one dividend over decades of investing just isn't going to move the needle.
Recently had money to deploy and debated waiting until I wouldn't get the dividend, but decided to buy anyways. In the grand scheme of things missing or getting one dividend over decades of investing just isn't going to move the needle.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Re: Buy VTSAX today (dividend record date)?
I took word of livesoft. I will buy VTSAX today. I am trying not to market time.
Re: Buy VTSAX today (dividend record date)?
An investor will never make an unfair buy: They will get any dividend they paid for and they will not get any dividend they did not pay for. So if there is a price drop the next day because of going ex-dividend, then surely the investor will get that dividend.
Re: Buy VTSAX today (dividend record date)?
Thanks for clarification. I wasn't sure exactly how it works. I just submitted the order.livesoft wrote: ↑Wed Sep 22, 2021 2:34 pmAn investor will never make an unfair buy: They will get any dividend they paid for and they will not get any dividend they did not pay for. So if there is a price drop the next day because of going ex-dividend, then surely the investor will get that dividend.
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Re: Buy VTSAX today (dividend record date)?
Curious where it says the record date for VTSAX distributions is today. The "Distributions" tab on Vanguard's site doesn't mention it yet: https://investor.vanguard.com/mutual-fu ... ions/vtsax (though obviously it's sometime this week)
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Re: Buy VTSAX today (dividend record date)?
See this link posted in this other thread from today (viewtopic.php?f=1&t=358577): https://advisors.vanguard.com/insights/ ... tributions. Use search function to look for "VTSAX" (it's page 38 of the PDF, I think)OhTheHueManatee wrote: ↑Wed Sep 22, 2021 2:38 pm Curious where it says the record date for VTSAX distributions is today. The "Distributions" tab on Vanguard's site doesn't mention it yet: https://investor.vanguard.com/mutual-fu ... ions/vtsax (though obviously it's sometime this week)
Re: Buy VTSAX today (dividend record date)?
Then, only invest 99.5% of the amount and keep the rest, but do it the following day.leviathan wrote: ↑Wed Sep 22, 2021 2:20 pmI want to get dividend.dukeblue219 wrote: ↑Wed Sep 22, 2021 2:10 pm Are you wanting the dividend or not?
You'll never truly lose out on a dividend. The system doesn't work that way. However, some people would rather not pay taxes on a dividend and would rather wait a day for the market price to adjust slightly and buy then.
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Re: Buy VTSAX today (dividend record date)?
Thanks!tashnewbie wrote: ↑Wed Sep 22, 2021 2:41 pmSee this link posted in this other thread from today (viewtopic.php?f=1&t=358577): https://advisors.vanguard.com/insights/ ... tributions. Use search function to look for "VTSAX" (it's page 38 of the PDF, I think)OhTheHueManatee wrote: ↑Wed Sep 22, 2021 2:38 pm Curious where it says the record date for VTSAX distributions is today. The "Distributions" tab on Vanguard's site doesn't mention it yet: https://investor.vanguard.com/mutual-fu ... ions/vtsax (though obviously it's sometime this week)
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
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Re: Buy VTSAX today (dividend record date)?
In the event of a market downturn within 61 days, VTSAX shareholders who bought now can harvest tax losses. In that case, it's better not to have the Q3 dividend or any other distributions on taxes. I see 2 issues here:
1)a minor increase in income tax on non qualified dividends--no big deal and
2)potentially more accounting chores when filing. I have not done this yet. As a lazy investor, I avoid events that trigger more tax work. The VTSAX's distributions are only dividends and not capitol gains so maybe that makes the accounting simpler. Bogleheads, please chime in if you've had tax filing experience with Mutual fund or ETF distributions when TLHing--are they easy to deal with?
1)a minor increase in income tax on non qualified dividends--no big deal and
2)potentially more accounting chores when filing. I have not done this yet. As a lazy investor, I avoid events that trigger more tax work. The VTSAX's distributions are only dividends and not capitol gains so maybe that makes the accounting simpler. Bogleheads, please chime in if you've had tax filing experience with Mutual fund or ETF distributions when TLHing--are they easy to deal with?
The 1st mix was too volatile, and the 2nd was too idle. But the 3rd allocation was just right!
Re: Buy VTSAX today (dividend record date)?
My recent dividend from Vanguard Total US Stock Market Index fund will remain qualified even if I sold them on Monday.Goldilocks wrote: ↑Fri Sep 24, 2021 8:39 pm In the event of a market downturn within 61 days, VTSAX shareholders who bought now can harvest tax losses. In that case, it's better not to have the Q3 dividend or any other distributions on taxes. I see 2 issues here:
1)a minor increase in income tax on non qualified dividends--no big deal and
2)potentially more accounting chores when filing. I have not done this yet. As a lazy investor, I avoid events that trigger more tax work. The VTSAX's distributions are only dividends and not capitol gains so maybe that makes the accounting simpler. Bogleheads, please chime in if you've had tax filing experience with Mutual fund or ETF distributions when TLHing--are they easy to deal with?
Do you understand why? That is, your premise "1)" probably does not apply to many people who received the dividend.
As for accounting chores, there are no accounting chores with regards to taxes if one uses tax-prep software that imports the 1099 info that one will have available early next year.
Have I had tax filing experience with mutual fund distributions? Yes. I posted an entire thread about it to demonstrate how trivial it is: viewtopic.php?t=179414
You should sell some shares just for the practice I think.
Re: Buy VTSAX today (dividend record date)?
If the market doesn't move, the share price will decline by the amount of the loss, so you have an increased capital loss equal to the amount of the distribution.Goldilocks wrote: ↑Fri Sep 24, 2021 8:39 pm In the event of a market downturn within 61 days, VTSAX shareholders who bought now can harvest tax losses. In that case, it's better not to have the Q3 dividend or any other distributions on taxes. I see 2 issues here:
1)a minor increase in income tax on non qualified dividends--no big deal and
2)potentially more accounting chores when filing. I have not done this yet. As a lazy investor, I avoid events that trigger more tax work. The VTSAX's distributions are only dividends and not capitol gains so maybe that makes the accounting simpler. Bogleheads, please chime in if you've had tax filing experience with Mutual fund or ETF distributions when TLHing--are they easy to deal with?
However, there are several issues with a distribution when harvesting a loss.
If you reinvest the distribution in the fund and sell within 31 days of the reinvestment, you will have a wash sale unless you also sell the share bought with the reinvested distribution. This can usually be avoided with no tax cost; the reinvested distribution is probably also at a loss.
If you held a share less than 61 days, any dividend on that share becomes non-qualified. (This is the most relevant issue for VTSAX.) You would get a capital loss equal to the market decline plus the amount of the dividend, but the dividend would become taxed at a higher rate.
If a share distributes a long-term gain, and you hold the share for six months or less, an amount equal to the long-term gain must be reclassified from short-term loss to long-term loss. This causes the long-term gain and share price decline to be tax-neutral. I have once encountered this with an ETF; Vanguard didn't make the adjustment, so I had to correct the type of loss on Form 8949.
If a share of a fund which does not accrue dividends daily distributes a tax-exempt dividend, and you sell that share for a loss after holding it six months or less, the capital loss must be decreased by the tax-exempt dividend. This affects investors holding muni ETFs, and those muni funds which do not accrue daily, such as Vanguard Tax-Managed Balanced Fund.