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There are many funds that own the entire market (or subsets of the market like small cap, mid cap, etc). And if I want to TLH, I need a similar asset to buy whe
by ffumarola 11y ago
There are many funds that own the entire market (or subsets of the market like small cap, mid cap, etc). And if I want to TLH, I need a similar asset to buy when I sell the asset that is losing money. Unless Vanguard has a lot of funds that serve similar purposes but are slightly different, you won't be able to do that using only Vanguard funds AFAIK.
- chollida1 11y agoWell whether or not Vanguard has a similar ETF is irrelevant as the IRS is very clear that if you sell an asset to do tax loss harvesting you can't buy it or any similar product back over the next 30 days if you want to collect the tax loss. I mean you can buy a similar product to the one you sold within the 30 days, you just don't qualify for the tax loss in that instance:) The below link discusses this pretty well and I've got way more experience wit this than I really care for. http://www.investopedia.com/articles/taxes/08/tax-loss-harvesting.asp http://www.investopedia.com/articles/taxes/08/tax-loss-harve...
- ffumarola 11y agoNot necessarily. The rules don't say "similar" they say "substantially identical." It isn't clear how they treat two index funds from different issuers (e.g., Vanguard and Schwab) that track the same index. While the IRS has not issued any guidance to suggest that such two funds are “substantially identical,” a more conservative approach when dealing with an index fund portfolio would be to repurchase a fund whose performance correlates closely with that of the harvested fund, but tracks a different index.