Can I switch my cost basis between SpecID and HIFO at Vanguard
Can I switch my cost basis between SpecID and HIFO at Vanguard
I am in the process of transitioning my portfolio to make it easier for my wife. In my Vanguard account can I switch back and forth between Specific ID and HIFO (Highest in, first out) for my VTSAX shares? Can I switch back to Specific ID once I have switched to HIFO? HIFO would be much easier for her as she would not have to go in and select specific tax lots. I do understand that we would have to be careful that HIFO did not sell shares with short term gains. Thanks
Drum
Drum
Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
One of my Vanguard MFs is set for Spec ID.
But every time I make a sale, it asks me what I want the share selection to be, and HIFO is one of the options.
So I think you can do what you’re wanting to do, based on my experience.
But every time I make a sale, it asks me what I want the share selection to be, and HIFO is one of the options.
So I think you can do what you’re wanting to do, based on my experience.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
I know if you sell shares under avg cost you cannot switch back to spec'id. I don't mess with it. Spec'id and forget it.
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Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
Thanks for the thoughts and advice. It sounds like I will be able to use HIFO with Specific ID as my cost basis election. I’ll check it out next time I’m in my account.
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Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
No, you would need to change from HIFO to Specific ID (or vice/versa) for the account(s) you select. It is one or the other.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
If I switch from Specific ID to HIFO to make things a bit easier for my wife can I switch back from HIFO to Specific ID at a later date?
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Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
Yes.
From Vanguard:
Set your preferred cost basis method
It's best to set your cost basis method immediately after you buy or acquire shares of a new investment. If you don't, when you sell shares of that investment, you'll have to pick a method before you can complete the transaction.
Even if you've already selected—and even used—one of these cost basis calculation methods, you can change it for future sales whenever you want.* And you can apply those changes to just one fund or to all the funds within an account. However, your new method will not automatically apply to any new investments that are added at a later time.
*If average cost was previously used, the shares you acquired before the method change may be locked with the average basis. By law, to revoke the average basis, you must change your cost basis method before the first sale, transfer, or disposition.
You must elect out of or into this method in writing. Upon the sale, transfer, or disposition of covered shares, you’ll be locked into the average cost method until you change it in writing.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
This is good information. Thank you for posting.rossington wrote: ↑Wed Oct 27, 2021 4:25 pmYes.
From Vanguard:
Set your preferred cost basis method
It's best to set your cost basis method immediately after you buy or acquire shares of a new investment. If you don't, when you sell shares of that investment, you'll have to pick a method before you can complete the transaction.
Even if you've already selected—and even used—one of these cost basis calculation methods, you can change it for future sales whenever you want.* And you can apply those changes to just one fund or to all the funds within an account. However, your new method will not automatically apply to any new investments that are added at a later time.
*If average cost was previously used, the shares you acquired before the method change may be locked with the average basis. By law, to revoke the average basis, you must change your cost basis method before the first sale, transfer, or disposition.
You must elect out of or into this method in writing. Upon the sale, transfer, or disposition of covered shares, you’ll be locked into the average cost method until you change it in writing.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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Re: Can I switch my cost basis between SpecID and HIFO at Vanguard
I was a little fuzzy on all of this too, that's why I checked it out.Stinky wrote: ↑Wed Oct 27, 2021 4:26 pmThis is good information. Thank you for posting.rossington wrote: ↑Wed Oct 27, 2021 4:25 pmYes.
From Vanguard:
Set your preferred cost basis method
It's best to set your cost basis method immediately after you buy or acquire shares of a new investment. If you don't, when you sell shares of that investment, you'll have to pick a method before you can complete the transaction.
Even if you've already selected—and even used—one of these cost basis calculation methods, you can change it for future sales whenever you want.* And you can apply those changes to just one fund or to all the funds within an account. However, your new method will not automatically apply to any new investments that are added at a later time.
*If average cost was previously used, the shares you acquired before the method change may be locked with the average basis. By law, to revoke the average basis, you must change your cost basis method before the first sale, transfer, or disposition.
You must elect out of or into this method in writing. Upon the sale, transfer, or disposition of covered shares, you’ll be locked into the average cost method until you change it in writing.
Here is the link to their form:
https://personal.vanguard.com/pdf/methodc103.pdf
This is a snippet from the form:
What you need to know about choosing a
cost basis method
Under new cost basis regulations, if you wish to use
the average cost method for shares purchased on or
after January 1, 2012, you must make this choice on
vanguard.com or by notifying Vanguard in writing (by
completing this form or sending instructions before
selling your shares. This applies to:
• Mutual fund shares.
• Stocks that have been designated for the Vanguard
Brokerage Services® dividend reinvestment
program (DRIP).
• Most ETFs structured as regulated investment
companies (RICs), including Vanguard ETFs
....so I think any changes to cost basis methods can be done online...
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.