TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

New to tax loss harvesting. I've got some losses in VFIAX that my wife and I could harvest.

I'm in Vanguard. I exchange VFIAX for VTSAX. I don't buy VFIAX again for awhile to keep safe from wash sale. I use transaction info (Vanguard sends it to me I hope) for form 8949. That carries over to form D and then to front page of 1040.

I don't do paper tax forms anymore, just simple online with Tax Slayer.

I've got a few VFIAX transactions to choose from .... should I worry about short-term or long-term for the capital loss?

Is there anything else I'm missing?

Thanks for help!
livesoft
Posts: 86075
Joined: Thu Mar 01, 2007 7:00 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by livesoft »

I find taxes and tax returns simple. Maybe you do as well?

The 1099-B that Vanguard sends you should be enough to fill out the forms of your tax return.
Wiki This signature message sponsored by sscritic: Learn to fish.
nalor511
Posts: 5058
Joined: Mon Jul 27, 2015 1:00 am

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by nalor511 »

1099b is very easy with tax software. I like OLT.com , free for fed, 9.95 for state
rkhusky
Posts: 17763
Joined: Thu Aug 18, 2011 8:09 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by rkhusky »

captmccrae wrote: Thu Sep 29, 2022 10:58 pm I'm in Vanguard. I exchange VFIAX for VTSAX. I don't buy VFIAX again for awhile to keep safe from wash sale. I use transaction info (Vanguard sends it to me I hope) for form 8949. That carries over to form D and then to front page of 1040.
Do you have VTSAX or VFIAX in any of your or your wife's other accounts? Do you reinvest dividends of VTSAX or VFIAX in your taxable account?
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

rkhusky wrote: Fri Sep 30, 2022 8:22 am
captmccrae wrote: Thu Sep 29, 2022 10:58 pm I'm in Vanguard. I exchange VFIAX for VTSAX. I don't buy VFIAX again for awhile to keep safe from wash sale. I use transaction info (Vanguard sends it to me I hope) for form 8949. That carries over to form D and then to front page of 1040.
Do you have VTSAX or VFIAX in any of your or your wife's other accounts? Do you reinvest dividends of VTSAX or VFIAX in your taxable account?
Yes, VTSAX in wife's Roth and my Roth. But I'm harvesting VFIAX. Thought that's what mattered for wash rules, the fund you're moving out of. I don't have VFIAX anywhere else
tashnewbie
Posts: 4283
Joined: Thu Apr 23, 2020 12:44 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by tashnewbie »

captmccrae wrote: Fri Sep 30, 2022 8:59 am
rkhusky wrote: Fri Sep 30, 2022 8:22 am
captmccrae wrote: Thu Sep 29, 2022 10:58 pm I'm in Vanguard. I exchange VFIAX for VTSAX. I don't buy VFIAX again for awhile to keep safe from wash sale. I use transaction info (Vanguard sends it to me I hope) for form 8949. That carries over to form D and then to front page of 1040.
Do you have VTSAX or VFIAX in any of your or your wife's other accounts? Do you reinvest dividends of VTSAX or VFIAX in your taxable account?
Yes, VTSAX in wife's Roth and my Roth. But I'm harvesting VFIAX. Thought that's what mattered for wash rules, the fund you're moving out of. I don't have VFIAX anywhere else
As a general rule, it's easier to TLH if you don't hold the same fund in taxable as you have in other accounts. If the market is really volatile and you want to be able to TLH "on the way down" without having to think about what's in your other accounts, it's easy enough to use different funds in taxable. For example, you could use VFIAX and VLCAX as TLH partners. If you're comfortable using ETFs, more options become available (e.g., ITOT, SCHB).
User avatar
cchrissyy
Posts: 2355
Joined: Fri May 05, 2017 10:35 pm
Location: SF bay area

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by cchrissyy »

the tax forms your brokerage gives you every year to report your sales are the same forms whether its gains or losses.
so if you already know how to import those forms in your tax software and how gains appear on your taxes then there is nothing extra you need to do when you are recording losses.
as long as you haven't got yourself into a rare or overcomplicated situation.
60-20-20 us-intl-bond
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

As a general rule, it's easier to TLH if you don't hold the same fund in taxable as you have in other accounts. If the market is really volatile and you want to be able to TLH "on the way down" without having to think about what's in your other accounts, it's easy enough to use different funds in taxable.
Thanks, that makes sense.

What if I'm not a super-savvy or active investor, and just want to do this once? Harvesting VFIAX and parking it in VTSAX is ok even if we hold VTSAX elsewhere, right?

I'm comfortable with and have no problem holding VTSAX forever.
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

cchrissyy wrote: Fri Sep 30, 2022 9:31 am the tax forms your brokerage gives you every year to report your sales are the same forms whether its gains or losses.
so if you already know how to import those forms in your tax software and how gains appear on your taxes then there is nothing extra you need to do when you are recording losses.
as long as you haven't got yourself into a rare or overcomplicated situation.
Have never sold/exchanged in our taxable accounts before. Just have bought and held. Then bought some more. Etc etc. Figured I'd get real fancy and maybe TLH now :)

So I've never used/gotten tax forms with sales before. Figure it's not rocket science, but just double-checking
lazynovice
Posts: 3369
Joined: Mon Apr 16, 2012 10:48 pm
Location: Denver area. Former Texan.

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by lazynovice »

captmccrae wrote: Fri Sep 30, 2022 9:34 am
As a general rule, it's easier to TLH if you don't hold the same fund in taxable as you have in other accounts. If the market is really volatile and you want to be able to TLH "on the way down" without having to think about what's in your other accounts, it's easy enough to use different funds in taxable.
Thanks, that makes sense.

What if I'm not a super-savvy or active investor, and just want to do this once? Harvesting VFIAX and parking it in VTSAX is ok even if we hold VTSAX elsewhere, right?

I'm comfortable with and have no problem holding VTSAX forever.
Yes, that’s fine.

BUT- we’ve all seen this before. If VTSAX drops enough, you’ll be back here asking how to TLH without creating wash sales with the other accounts. That gets more complicated and it’s easy to avoid by TLH to something besides VTSAX.
rkhusky
Posts: 17763
Joined: Thu Aug 18, 2011 8:09 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by rkhusky »

lazynovice wrote: Fri Sep 30, 2022 9:46 am
captmccrae wrote: Fri Sep 30, 2022 9:34 am
As a general rule, it's easier to TLH if you don't hold the same fund in taxable as you have in other accounts. If the market is really volatile and you want to be able to TLH "on the way down" without having to think about what's in your other accounts, it's easy enough to use different funds in taxable.
Thanks, that makes sense.

What if I'm not a super-savvy or active investor, and just want to do this once? Harvesting VFIAX and parking it in VTSAX is ok even if we hold VTSAX elsewhere, right?

I'm comfortable with and have no problem holding VTSAX forever.
Yes, that’s fine.

BUT- we’ve all seen this before. If VTSAX drops enough, you’ll be back here asking how to TLH without creating wash sales with the other accounts. That gets more complicated and it’s easy to avoid by TLH to something besides VTSAX.
VLCAX (Large Cap Index) is a good option.
HomeStretch
Posts: 11415
Joined: Thu Dec 27, 2018 2:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by HomeStretch »

I don’t know about Tax Slayer but some tax prep software packages (such as TurboTax (TT)) allow you to import the brokerage Form 1099-B. The data import into TT of Vanguard’s Form 1099-B has accurately populated Form 8949 and Schedule D.
User avatar
Duckie
Posts: 9777
Joined: Thu Mar 08, 2007 1:55 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by Duckie »

captmccrae wrote: Fri Sep 30, 2022 8:59 am I don't have VFIAX anywhere else
But do you or your wife have a 500 Index fund anywhere else? Some employer plans have a 500 Index option that isn't specifically titled "500 Index".
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

Duckie wrote: Fri Sep 30, 2022 4:58 pm
captmccrae wrote: Fri Sep 30, 2022 8:59 am I don't have VFIAX anywhere else
But do you or your wife have a 500 Index fund anywhere else? Some employer plans have a 500 Index option that isn't specifically titled "500 Index".
I knew I missed some stuff. Yes, we actually do. As state employee, we have NC 401's and 457's. Big part of our allocation is in Large Cap Index Fund.

Write-up says:
The North Carolina Large Cap Index Fund (the “Fund”) is offered exclusively for participants in the
NC 401(k) and NC 457 Plans. Effective 01/01/2016, the Fund is held in a group trust and you own
units of the group trust. The Fund invests in the Equity Index Fund F collective investment trust
(“C.I.T.”) managed by BlackRock which attempts to replicate the composition and performance of
the S&P 500 Index.

So dangit! Sure looks like that's same as VFIAX and we could be in wash sale situation. Doggone it!
rkhusky
Posts: 17763
Joined: Thu Aug 18, 2011 8:09 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by rkhusky »

captmccrae wrote: Fri Sep 30, 2022 5:33 pm So dangit! Sure looks like that's same as VFIAX and we could be in wash sale situation. Doggone it!
You could switch all the NC Large Cap to something else.
Or put a temporary hold on purchasing new shares.
Or accept the wash sale if the number of shares being washed is small compared to the number being TLH'd. (You would likely need to compute the ratio of VFIAX/Large Cap to determine the equivalent shares).
Topic Author
captmccrae
Posts: 53
Joined: Fri Dec 30, 2016 1:06 pm

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by captmccrae »

rkhusky wrote: Fri Sep 30, 2022 6:33 pm
captmccrae wrote: Fri Sep 30, 2022 5:33 pm So dangit! Sure looks like that's same as VFIAX and we could be in wash sale situation. Doggone it!
You could switch all the NC Large Cap to something else.
Or put a temporary hold on purchasing new shares.
Or accept the wash sale if the number of shares being washed is small compared to the number being TLH'd. (You would likely need to compute the ratio of VFIAX/Large Cap to determine the equivalent shares).
This has come full-circle. I thought I was good to go, some folks commented saying "we've seen this all before" and well of course here I am.

After some searching it seems there's no true consensus about substantially identical. NC Large Cap (which is Blackrock Equity Fund F) and VFIAX (Vanguard 500) follow same benchmark but likely have some very minor differences. Tough to tell because I can't find exact details about Equity Fund F.

I could make some temporary changes to our 401 and 457, swapping out NC Large Cap for a few months for something else. I think that'd work.

Absolutely thankful for your help folks!
User avatar
Nate79
Posts: 9372
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: TLH Tax Form Qs .... Simple Enough for Guy Who Does His Own Taxes?

Post by Nate79 »

Well, if you search on here you will find there is no consensus that 401k, 403b, 457, etc employer retirement accounts are included in wash sales. I'm on the side they are not included but there are tons of threads and posts on here.
Post Reply