Tax loss harvesting and wash sale rule

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Topic Author
scalawag73
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Tax loss harvesting and wash sale rule

Post by scalawag73 »

I’ve seen some BH’s warn about how holding a particular index fund or ETF in one investment account can complicate one’s ability to tax loss harvest in another, but I don’t quite understand it. For example, if I hold VXUS in my Roth IRA and also own it in my taxable account, would it make it harder to do TLH in the future? I’m in the process of deciding what to buy in my newly-converted Roth IRA. I already hold VTIAX in my existing Roth, and I also own VXUS in my taxable account. If I put money into either VXUS or VTIAX in my newly-converted Roth IRA, will I make things harder for myself if I need to do some TLH later?
My ideal retirement portfolio (after I roll over 401k to tIRA): VT (50%) VBR (15%) BNDW (15%) TIP (20%)
niagara_guy
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Re: Tax loss harvesting and wash sale rule

Post by niagara_guy »

If you sell a security( stock, fund or etf) at a loss in a taxable account and have bought same security within 30 days before or after the sale that is a wash sale. It does not matter what kind of account (individual, IRA, Roth) the buy occurred in and applies to your spouse's accounts as well. Having dividend reinvest turned on will result in a buy every time the security pays a dividend. I keep dividend reinvestment turned off for our accounts and will reinvest the dividends when I know it will not cause a wash sale.

There is true for stocks/funds/etfs that are 'substantially identical.' for example, there are several funds that all track the s&p 500 index, I would consider them to be 'substantially identical.'
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arcticpineapplecorp.
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Re: Tax loss harvesting and wash sale rule

Post by arcticpineapplecorp. »

yeah, don't use the same funds in taxable as in IRA.

not substantially identical investments to vtiax/vxus would be:

vfwax (FTSE All-World ex-US Index Fund)
vtmgx (developed markets index fund)

here are more:

https://www.bogleheads.org/wiki/Tax_los ... tute_funds
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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scalawag73
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Re: Tax loss harvesting and wash sale rule

Post by scalawag73 »

This is very helpful, thank you! I was not aware of the dividend reinvestment issue — very important to know!

Do you think VEMAX or VWO, the fund or ETF version of Vanguard’s emerging markets products, would be considered “substantially identical” to either VTIAX or VXUS?
My ideal retirement portfolio (after I roll over 401k to tIRA): VT (50%) VBR (15%) BNDW (15%) TIP (20%)
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Duckie
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Re: Tax loss harvesting and wash sale rule

Post by Duckie »

scalawag73 wrote: Mon Jun 27, 2022 1:48 pm Do you think VEMAX or VWO, the fund or ETF version of Vanguard’s emerging markets products, would be considered “substantially identical” to either VTIAX or VXUS?
No VEMAX/VWO are not substantially identical. But they only cover about 20% of the international stock market.

Here is a list of possible Tax-Loss Harvest (TLH) retail partners with the indexes they follow:
  • US Total Stock
    • VTSAX (VTI) - CRSP US Total Market Index
    • SCHB - Dow Jones US Broad Market Index
    • ITOT - S&P Total Market Index
    • IWV, VTHR, TIEIX, BKTSX - Russell 3000 Index
    • SWTSX, FSKAX - Dow Jones US Total Stock Market Index
    • FZROX* - Fidelity US Total Investable Market Index
    • SPTM - S&P Composite 1500 Index
  • US Large Cap
    • VFIAX (VOO), WFSPX (IVV), SPY, FXAIX, SWPPX - S&P 500 Index
    • VLCAX (VV) - CRSP US Large Cap Index
    • IWB, VONE - Russell 1000 Index
    • SCHX - Dow Jones US Large-Cap Total Stock Market Index
    • SCHK, SNXFX - Schwab 1000 Index
    • FNILX* - Fidelity US Large Cap Index
    • MGC - CRSP US Mega Cap Index
  • US Mid/Small Cap (aka Extended Market)
    • VEXAX (VXF) - S&P Completion Index
    • SSMKX - Russell Small Cap Completeness Index
    • FSMAX - Dow Jones U.S. Completion Total Stock Market Index
    • USMIX - Wilshire 4500 Completion Index
  • US Mid Cap
    • VIMAX (VO) - CRSP US Mid Cap Index
    • IVOO, IJH, SPMD - S&P MidCap 400 Index
    • SCHM - Dow Jones US Mid-Cap Total Stock Market Index.
    • FSMDX - Russell Mid Cap Index
  • US Small Cap
    • VSMAX (VB) - CRSP US Small Cap Index
    • VTMSX, VIOO, IJR, SLY - S&P SmallCap 600 Index
    • SCHA - Dow Jones US Small-Cap Total Stock Market Index
    • FSSNX - Russell 2000 Index
  • International
    • VTIAX (VXUS) - FTSE Global All Cap ex US Index
    • VFWAX (VEU) - FTSE All-World ex US Index
    • FTIHX, IXUS - MSCI ACWI ex USA IMI Index
    • FSGGX - MSCI ACWI ex USA Index
    • FZILX* - Fidelity Global ex US Index
    • VTMGX (VEA) - FTSE Developed All Cap ex US Index
    • SCHF - FTSE Developed ex US Index
    • IEFA - MSCI EAFE Investable Market Index
    • EFA, SWISX, FSPSX - MSCI EAFE Index
To me, if they follow a different index they are not "substantially identical" and there is no chance of a wash sale.
____* Proprietary fund not suitable for a taxable account.
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arcticpineapplecorp.
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Re: Tax loss harvesting and wash sale rule

Post by arcticpineapplecorp. »

scalawag73 wrote: Mon Jun 27, 2022 1:48 pm This is very helpful, thank you! I was not aware of the dividend reinvestment issue — very important to know!

Do you think VEMAX or VWO, the fund or ETF version of Vanguard’s emerging markets products, would be considered “substantially identical” to either VTIAX or VXUS?
no, they're not so you can use them but they're riskier than the total international because emerging markets as was said by Duckie only make up 20% of total international. So I wouldn't do that when you have the other partners I mentioned before that are closer but not tracking the same index. Using emerging markets will track performance differently than using a more broad based international fund.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
rkhusky
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Re: Tax loss harvesting and wash sale rule

Post by rkhusky »

You can reinvest dividends if you use different funds in your taxable account versus your tax-advantaged accounts.
esetter
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Re: Tax loss harvesting - Related Question

Post by esetter »

Assuming you had the funds available, could you purchase additional shares (perhaps in a different account) and the following day sell, using specific lot identification, the identical number of shares in order to tax loss harvest?
rkhusky
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Re: Tax loss harvesting - Related Question

Post by rkhusky »

esetter wrote: Tue Jun 28, 2022 5:21 pm Assuming you had the funds available, could you purchase additional shares (perhaps in a different account) and the following day sell, using specific lot identification, the identical number of shares in order to tax loss harvest?
Yes, as long as you don’t purchase a substantially identical replacement. However, in this case your stock allocation would be higher for a few hours or a day, rather than lower for a few hours or a day.

The probability of a big gain or loss is small, and it’s not possible to tell if you would gain or lose by either method. The expected 1-day return of the US market is about 0.04%. If you are moving $10K, it’s not a big deal. If you are moving $1M, you might be more nervous. Exchanging mutual funds removes the risk.

You can also do a simultaneous swap with two funds in a tax-advantaged account to maintain your asset allocation.
esetter
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Re: Tax loss harvesting and wash sale rule

Post by esetter »

I’m not concerned about short-term maket moves; only about the wash sale implications.
rkhusky
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Re: Tax loss harvesting and wash sale rule

Post by rkhusky »

esetter wrote: Tue Jun 28, 2022 9:07 pm I’m not concerned about short-term maket moves; only about the wash sale implications.
I’m that case, just make sure that you haven’t purchased any of the fund you are TLH’ing in any of your or your spouses accounts in the last 30 days. If you have, sell those shares first. And don’t purchase any shares in any accounts for the next 30 days.
Gaston
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Re: Tax loss harvesting and wash sale rule

Post by Gaston »

niagara_guy wrote: Mon Jun 27, 2022 1:40 pm If you sell a security( stock, fund or etf) at a loss in a taxable account and have bought same security within 30 days before or after the sale that is a wash sale. It does not matter what kind of account (individual, IRA, Roth) the buy occurred in and applies to your spouse's accounts as well.
This is great information. I notice that 401k’s are not mentioned in the above. If I sell an S&P 500 index investment in my taxable account and within 30 days purchase a similar S&P 500 index product in my 401k account, have I also run afoul of the wash/sale rule?

Also, who determines if a wash/sale violation has occurred? Just the IRS? Or do Fidelity, Schwab, Vanguard, etc, calculate 1099 gains/losses based on whether they think the rule was violated?

Thx.
“My opinions are just that - opinions.”
student
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Re: Tax loss harvesting and wash sale rule

Post by student »

Gaston wrote: Wed Jun 29, 2022 6:23 am
niagara_guy wrote: Mon Jun 27, 2022 1:40 pm If you sell a security( stock, fund or etf) at a loss in a taxable account and have bought same security within 30 days before or after the sale that is a wash sale. It does not matter what kind of account (individual, IRA, Roth) the buy occurred in and applies to your spouse's accounts as well.
This is great information. I notice that 401k’s are not mentioned in the above. If I sell an S&P 500 index investment in my taxable account and within 30 days purchase a similar S&P 500 index product in my 401k account, have I also run afoul of the wash/sale rule?

Also, who determines if a wash/sale violation has occurred? Just the IRS? Or do Fidelity, Schwab, Vanguard, etc, calculate 1099 gains/losses based on whether they think the rule was violated?

Thx.
Different posters have different opinions regarding 401k's. You need to read the statement of the law to draw your own conclusion. My opinion is that 401k accounts are affected by wash sale.

If you have a wash sale due to a buy in Fidelity and sell in Schwab, then, of course, you have to make adjustments yourself. If both are at one brokerage, then it will adjust for you. My understanding is that it will only automatically adjust sales with the same fund. If it is not adjusted due to different funds, the taxpayer is responsible to report wash sale of "substantially identical" shares, which is not well-defined.
UpperNwGuy
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Re: Tax loss harvesting and wash sale rule

Post by UpperNwGuy »

Gaston wrote: Wed Jun 29, 2022 6:23 am
niagara_guy wrote: Mon Jun 27, 2022 1:40 pm If you sell a security( stock, fund or etf) at a loss in a taxable account and have bought same security within 30 days before or after the sale that is a wash sale. It does not matter what kind of account (individual, IRA, Roth) the buy occurred in and applies to your spouse's accounts as well.
This is great information. I notice that 401k’s are not mentioned in the above. If I sell an S&P 500 index investment in my taxable account and within 30 days purchase a similar S&P 500 index product in my 401k account, have I also run afoul of the wash/sale rule?

Also, who determines if a wash/sale violation has occurred? Just the IRS? Or do Fidelity, Schwab, Vanguard, etc, calculate 1099 gains/losses based on whether they think the rule was violated?

Thx.
Yes and yes.
Gaston
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Re: Tax loss harvesting and wash sale rule

Post by Gaston »

One more question pls. Suppose you have violated the wash/sale rule in the following manner:

1. On Day 1 you sold specific shares (not all shares) of fund ABC, locking in a capital loss of $20,000.

2. You still own some shares of ABC, forgot to turn off dividend reinvesting, and on Day 17 you purchased (via dividend reinvestment) new ABC shares worth $1,000.

In this scenario, have you a) forfeited the full $20,000 capital gains loss, or b) will you still have a $19,0000 capital loss, or c) will you have some other outcome?

Thank you all again.
“My opinions are just that - opinions.”
student
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Re: Tax loss harvesting and wash sale rule

Post by student »

Gaston wrote: Wed Jun 29, 2022 7:40 am One more question pls. Suppose you have violated the wash/sale rule in the following manner:

1. On Day 1 you sold specific shares (not all shares) of fund ABC, locking in a capital loss of $20,000.

2. You still own some shares of ABC, forgot to turn off dividend reinvesting, and on Day 17 you purchased (via dividend reinvestment) new ABC shares worth $1,000.

In this scenario, have you a) forfeited the full $20,000 capital gains loss, or b) will you still have a $19,0000 capital loss, or c) will you have some other outcome?

Thank you all again.
You only have to adjust for the new shares. So you only transfer a small amount of capital loss into the cost basis of the new ABC shares. You will capture it back when you sell these new shares. You can capture it by selling the new shares now.
rkhusky
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Re: Tax loss harvesting and wash sale rule

Post by rkhusky »

Gaston wrote: Wed Jun 29, 2022 7:40 am One more question pls. Suppose you have violated the wash/sale rule in the following manner:

1. On Day 1 you sold specific shares (not all shares) of fund ABC, locking in a capital loss of $20,000.

2. You still own some shares of ABC, forgot to turn off dividend reinvesting, and on Day 17 you purchased (via dividend reinvestment) new ABC shares worth $1,000.

In this scenario, have you a) forfeited the full $20,000 capital gains loss, or b) will you still have a $19,0000 capital loss, or c) will you have some other outcome?

Thank you all again.
Wash sales are on a share by share basis, not dollars. The replacement shares are matched in date order starting with the oldest shares that were sold for a loss. In most cases that creates a smaller wash in terms of dollars.

For example, if you sell 1000 shares for a loss and the dividend purchases 5 shares, you cannot claim the loss on the oldest 5 shares sold, but can claim the loss on the newest 995 shares.

Brokerages are only required to report wash sales for the same fund in the same account.

All accounts that are set up for your benefit and for which you can cause shares to be acquired can cause wash sales.
harvestbook
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Re: Tax loss harvesting and wash sale rule

Post by harvestbook »

rkhusky wrote: Wed Jun 29, 2022 9:22 am

Wash sales are on a share by share basis, not dollars. The replacement shares are matched in date order starting with the oldest shares that were sold for a loss. In most cases that creates a smaller wash in terms of dollars.

For example, if you sell 1000 shares for a loss and the dividend purchases 5 shares, you cannot claim the loss on the oldest 5 shares sold, but can claim the loss on the newest 995 shares.
On the flip side of that issue, if you have a dividend reinvestment less than 30 days before you sold for a loss, can you still take the loss minus the dividend-reinvestment amount?
Despite all my reading on this I didn't realize the 30 days applied to both before and after the sale. Thanks.
I'm not smart enough to know, and I can't afford to guess.
Gaston
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Re: Tax loss harvesting and wash sale rule

Post by Gaston »

rkhusky wrote: Wed Jun 29, 2022 9:22 am Brokerages are only required to report wash sales for the same fund in the same account.
Interesting. So if I sell some VOO in my taxable account, then acquire some new VOO shares via dividend reinvestment in my IRA account, brokerages won’t report this as a wash sale?
“My opinions are just that - opinions.”
rkhusky
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Re: Tax loss harvesting and wash sale rule

Post by rkhusky »

Gaston wrote: Wed Jun 29, 2022 12:45 pm
rkhusky wrote: Wed Jun 29, 2022 9:22 am Brokerages are only required to report wash sales for the same fund in the same account.
Interesting. So if I sell some VOO in my taxable account, then acquire some new VOO shares via dividend reinvestment in my IRA account, brokerages won’t report this as a wash sale?
The brokerage isn’t required to and they rarely report things they don’t have to. It’s your responsibility to report it.

However, I won’t guarantee it won’t get reported if both accounts are at the same brokerage. But I would be greatly surprised if it was.
Gaston
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Re: Tax loss harvesting and wash sale rule

Post by Gaston »

rkhusky wrote: Wed Jun 29, 2022 3:06 pm The brokerage isn’t required to and they rarely report things they don’t have to. It’s your responsibility to report it.

However, I won’t guarantee it won’t get reported if both accounts are at the same brokerage. But I would be greatly surprised if it was.
Thank you. Much appreciated.
“My opinions are just that - opinions.”
Statistical
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Re: Tax loss harvesting and wash sale rule

Post by Statistical »

harvestbook wrote: Wed Jun 29, 2022 10:11 am
rkhusky wrote: Wed Jun 29, 2022 9:22 am

Wash sales are on a share by share basis, not dollars. The replacement shares are matched in date order starting with the oldest shares that were sold for a loss. In most cases that creates a smaller wash in terms of dollars.

For example, if you sell 1000 shares for a loss and the dividend purchases 5 shares, you cannot claim the loss on the oldest 5 shares sold, but can claim the loss on the newest 995 shares.
On the flip side of that issue, if you have a dividend reinvestment less than 30 days before you sold for a loss, can you still take the loss minus the dividend-reinvestment amount?
Despite all my reading on this I didn't realize the 30 days applied to both before and after the sale. Thanks.
Yes you could. Part of the loss would be washed out by the recent purchase but the rest would stand. However you could just also sell the purchase made within 30 days of sell date. In fact because TLH usually occurs in bear markets the recent purchase within 30 days is very likely in the red so you would want to TLH it.

So if you login and you see crap I made a purchase within the last 30 days you have three options
1) delay and wait until it has been 31 days since the most recent purchase before doing the sale.
2) sell any purchases within the last 30 days in addition to any other lots you want to sell
3) take a wash sale on the shares purchased in the last 30 days
Last edited by Statistical on Wed Jun 29, 2022 3:41 pm, edited 1 time in total.
Statistical
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Re: Tax loss harvesting and wash sale rule

Post by Statistical »

Gaston wrote: Wed Jun 29, 2022 12:45 pm
rkhusky wrote: Wed Jun 29, 2022 9:22 am Brokerages are only required to report wash sales for the same fund in the same account.
Interesting. So if I sell some VOO in my taxable account, then acquire some new VOO shares via dividend reinvestment in my IRA account, brokerages won’t report this as a wash sale?
I can tell you for a fact that at least in 2020 Fidelity did not. Nothing reported at all. I also unaware of the rule didn't adjust my loss when filing my tax return. Technically it was a mistake. It was accepted and processed without issue. The IRS doesn't get transaction records from IRAs. No broker is going to do the adjustments for you. Hell the 1099 don't even warn you there might be a possible cross account wash sale. Short of an audit and the adjuster on a whim wanting to look through each IRA transaction and compare it to the 1099 it is never gone to be anything more than an academic curiosity.

My guess is >99% of non-professional investors even know such a rule exists and if they did how they would need to manually adjust the basis in their tax return. I would hazard to guess there are countless millions of unreported cross account wash sales each year.

Brokerage are required to do automatic wash sale adjustment solely based on buying and selling within a single taxable account. Given that involves cost and customer service time when people are confused or think it is wrong and they don't get compensated for it I think it is incredibly unlikely any brokerage out there is doing extra uncompensated work that they aren't legally obligated to do.
AnEngineer
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Re: Tax loss harvesting and wash sale rule

Post by AnEngineer »

Statistical wrote: Wed Jun 29, 2022 3:40 pm
Gaston wrote: Wed Jun 29, 2022 12:45 pm
rkhusky wrote: Wed Jun 29, 2022 9:22 am Brokerages are only required to report wash sales for the same fund in the same account.
Interesting. So if I sell some VOO in my taxable account, then acquire some new VOO shares via dividend reinvestment in my IRA account, brokerages won’t report this as a wash sale?
I can tell you for a fact that at least in 2020 Fidelity did not. Nothing reported at all. I also unaware of the rule didn't adjust my loss when filing my tax return. Technically it was a mistake. It was accepted and processed without issue. The IRS doesn't get transaction records from IRAs. No broker is going to do the adjustments for you. Hell the 1099 don't even warn you there might be a possible cross account wash sale. Short of an audit and the adjuster on a whim wanting to look through each IRA transaction and compare it to the 1099 it is never gone to be anything more than an academic curiosity.

My guess is >99% of non-professional investors even know such a rule exists and if they did how they would need to manually adjust the basis in their tax return. I would hazard to guess there are countless millions of unreported cross account wash sales each year.

Brokerage are required to do automatic wash sale adjustment solely based on buying and selling within a single taxable account. Given that involves cost and customer service time when people are confused or think it is wrong and they don't get compensated for it I think it is incredibly unlikely any brokerage out there is doing extra uncompensated work that they aren't legally obligated to do.
Not just technically, it was a mistake. I would file an amended return ASAP if not done already, especially as you've admitted to knowing of the error
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scalawag73
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Re: Tax loss harvesting and wash sale rule

Post by scalawag73 »

Duckie wrote: Mon Jun 27, 2022 4:48 pm
scalawag73 wrote: Mon Jun 27, 2022 1:48 pm Do you think VEMAX or VWO, the fund or ETF version of Vanguard’s emerging markets products, would be considered “substantially identical” to either VTIAX or VXUS?
No VEMAX/VWO are not substantially identical. But they only cover about 20% of the international stock market.

Here is a list of possible Tax-Loss Harvest (TLH) retail partners with the indexes they follow:
  • US Total Stock
    • VTSAX (VTI) - CRSP US Total Market Index
    • SCHB - Dow Jones US Broad Market Index
    • ITOT - S&P Total Market Index
    • IWV, VTHR, TIEIX, BKTSX - Russell 3000 Index
    • SWTSX, FSKAX - Dow Jones US Total Stock Market Index
    • FZROX* - Fidelity US Total Investable Market Index
    • SPTM - S&P Composite 1500 Index
  • US Large Cap
    • VFIAX (VOO), WFSPX (IVV), SPY, FXAIX, SWPPX - S&P 500 Index
    • VLCAX (VV) - CRSP US Large Cap Index
    • IWB, VONE - Russell 1000 Index
    • SCHX - Dow Jones US Large-Cap Total Stock Market Index
    • SCHK, SNXFX - Schwab 1000 Index
    • FNILX* - Fidelity US Large Cap Index
    • MGC - CRSP US Mega Cap Index
  • US Mid/Small Cap (aka Extended Market)
    • VEXAX (VXF) - S&P Completion Index
    • SSMKX - Russell Small Cap Completeness Index
    • FSMAX - Dow Jones U.S. Completion Total Stock Market Index
    • USMIX - Wilshire 4500 Completion Index
  • US Mid Cap
    • VIMAX (VO) - CRSP US Mid Cap Index
    • IVOO, IJH, SPMD - S&P MidCap 400 Index
    • SCHM - Dow Jones US Mid-Cap Total Stock Market Index.
    • FSMDX - Russell Mid Cap Index
  • US Small Cap
    • VSMAX (VB) - CRSP US Small Cap Index
    • VTMSX, VIOO, IJR, SLY - S&P SmallCap 600 Index
    • SCHA - Dow Jones US Small-Cap Total Stock Market Index
    • FSSNX - Russell 2000 Index
  • International
    • VTIAX (VXUS) - FTSE Global All Cap ex US Index
    • VFWAX (VEU) - FTSE All-World ex US Index
    • FTIHX, IXUS - MSCI ACWI ex USA IMI Index
    • FSGGX - MSCI ACWI ex USA Index
    • FZILX* - Fidelity Global ex US Index
    • VTMGX (VEA) - FTSE Developed All Cap ex US Index
    • SCHF - FTSE Developed ex US Index
    • IEFA - MSCI EAFE Investable Market Index
    • EFA, SWISX, FSPSX - MSCI EAFE Index
To me, if they follow a different index they are not "substantially identical" and there is no chance of a wash sale.
____* Proprietary fund not suitable for a taxable account.
Thank you, Duckie and arcticpineapplecorp!
Yep, I'm aware VEMAX and VWO are limited to emerging markets and are not suitable replacements for VTIAX/VXUS. I want to increase my exposure to emerging markets stocks, because I don't think I'm getting enough exposure to emerging markets with my VTIAX holdings in my Roth, or my VXUS holdings in my taxable account. Check out this article for more info on that: https://www.optimizedportfolio.com/vea-vwo-vxus/

So, now that I've converted my TIRA to a Roth and I'm ready to choose the investments in which to put the $6000 for 2022, I'm looking at either VEMAX or VWO to increase my emerging markets stock holdings. (I have absolutely zero international stock funds in my 401k because the options were so expensive and limited). My only remaining question is whether to choose a the fund (VEMAX) or the ETF (VWO). The .14% ER in VEMAX gives me heartburn, but funds have other advantages over ETFs in IRA accounts (like being able to fully invest the entire $6000 annual contribution limit and not having a few dollars left uninvested which is what often happens with ETFs). On the other hand, the ETF has a much lower .08% ER. It's a matter of personal preference, I guess.
My ideal retirement portfolio (after I roll over 401k to tIRA): VT (50%) VBR (15%) BNDW (15%) TIP (20%)
hkcj
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Re: Tax loss harvesting and wash sale rule

Post by hkcj »

rkhusky wrote: Wed Jun 29, 2022 9:22 am Wash sales are on a share by share basis, not dollars. The replacement shares are matched in date order starting with the oldest shares that were sold for a loss. In most cases that creates a smaller wash in terms of dollars.
Purely for curiosity (thanks to this forum I've been very careful to set things up so I don't encounter wash sales!) - how does this work when the ratio / NAV of a fund is different? E.g. 1 share of VTI ≈ 2 shares of VTIAX - so if you sell one to buy the other your loss is applied share for share?

Seems weird (and for VTIAX to VTI would seem to allow you to still take half your loss!)
rkhusky
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Re: Tax loss harvesting and wash sale rule

Post by rkhusky »

hkcj wrote: Mon Jun 19, 2023 12:31 pm
rkhusky wrote: Wed Jun 29, 2022 9:22 am Wash sales are on a share by share basis, not dollars. The replacement shares are matched in date order starting with the oldest shares that were sold for a loss. In most cases that creates a smaller wash in terms of dollars.
Purely for curiosity (thanks to this forum I've been very careful to set things up so I don't encounter wash sales!) - how does this work when the ratio / NAV of a fund is different? E.g. 1 share of VTI ≈ 2 shares of VTIAX - so if you sell one to buy the other your loss is applied share for share?

Seems weird (and for VTIAX to VTI would seem to allow you to still take half your loss!)
It would be VTSAX vs VTI. You figure out the price ratio between the two and adjust the number of shares of one of them based on that.
hkcj
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Re: Tax loss harvesting and wash sale rule

Post by hkcj »

Ok thanks - good to know though I hope I never need to make use of the info :). Appreciated!
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