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I've been thinking the same thing since VTSAX is diving and I'm anticipating stock grants this year. A quick search turned up https://www.physicianonfire.com/tax-loss-harvesting-vanguard which covers some Vanguard-specific stuff. I'm mostly interested in finding the best alternative to VTSAX to avoid a wash sale since I don't want to sit on my hands for 30 days. All this is probably on bogleheads already. e: Some bogleheads seem to recommend VFIAX as a TLH partner to VTSAX, which seems close if not ideal. Loucks fucked around with this message at 16:06 on May 12, 2022 |
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May 12, 2022 15:54
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A quick follow-up question: I previously sold VTSAX shares using average cost (it was the default and I wasn't thinking about tax loss harvesting). I've now changed to SpecID, but I believe that change will only allow me to harvest losses on VTSAX lots acquired from this point forward. Is that correct?
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May 12, 2022 16:18
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Loucks posted:e: Some bogleheads seem to recommend VFIAX as a TLH partner to VTSAX, which seems close if not ideal.
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May 12, 2022 16:19
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Ersatz posted:A quick follow-up question: I previously sold VTSAX shares using average cost (it was the default and I wasn't thinking about tax loss harvesting). Your previous lots (before switching to SpecID) will be forever averaged. Your new lots will be accurate to each purchase. You can still tax loss harvest the old lots, but they will have the pre-switch average cost, so depending on what that cost is, you can still choose to tax loss harvest.
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May 12, 2022 16:29
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80k posted:Your previous lots (before switching to SpecID) will be forever averaged. Your new lots will be accurate to each purchase. You can still tax loss harvest the old lots, but they will have the pre-switch average cost, so depending on what that cost is, you can still choose to tax loss harvest.
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May 12, 2022 16:32
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tpink posted:Jesus, that’s sad. But also, come on, dude.  God I hate Crytpo.
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May 12, 2022 17:00
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Mu Zeta posted:If you're ever tempted to dabble in gambling then check out all the suicide stuff in this crypto subreddit What happened that caused the price to drop so much so fast? Is this some scam coin?
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May 12, 2022 18:16
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Astro7x posted:What happened that caused the price to drop so much so fast? Is this some scam coin? My (poor) understanding is that there were two coins tied to each other - Luna and TerraUSD. TerraUSD is supposed to be tethered to the dollar. The way it works is by having a backing of Luna (so basically buying a TerraUSD is like buying the Luna that backs it) and burning or minting new Luna to keep the price the same - if the Luna's value goes down, TerraUSD mints more Luna to prop up its value and if Luna's value goes up, TerraUSD burns Luna to lower its value back down. This works if TerraUSD is very small relative to Luna, such that the minting and burning doesn't cause huge inflation or deflation swings, but guess what happened? Basically, at one point TerraUSD hit like 50 cents on the dollar and the entire thing collapsed under hyperinflation.
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May 12, 2022 18:27
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I have no idea if this is accurate but it seems to be circulating:
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May 12, 2022 18:41
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Well, this sure is an interesting time to have started my investing career with index funds about a month ago. As I understand the numbers should eventually, in theory, go up too 
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May 12, 2022 19:11
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Fabulous Knight posted:Well, this sure is an interesting time to have started my investing career with index funds about a month ago. As I understand the numbers should eventually, in theory, go up too Yes. That or the global economic order is doomed, but in that case, there's no safe investment other than maybe take some classes in wilderness survival and stock up on canned goods, lol.
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May 12, 2022 19:13
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This might be a silly thing to do, but in addition to my regular DCAin, I put in some larger "good until canceled" orders for VTI in the event of 20% drops. I figure I might as well try to view a potential bear market as an intellectual challenge and buying opportunity.
Eric Cantonese fucked around with this message at 19:18 on May 12, 2022 |
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May 12, 2022 19:16
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Leperflesh posted:I have no idea if this is accurate but it seems to be circulating: I doubt that the conspiracy theory the Blackrock is taking down crypto is the accurate post. The explainer seems clearer and more plausible/backed up with sources. https://www.todayintabs.com/p/unstable?s=r
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May 12, 2022 19:20
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Fabulous Knight posted:Well, this sure is an interesting time to have started my investing career with index funds about a month ago. As I understand the numbers should eventually, in theory, go up too May I present to you the first trade on my account.  It worked out. Eventually. Leperflesh posted:Yes. I am considering selling off a bit of stock to put solar panels on my house! (not seriously, but I toy around with the idea enough that if things do go seriously pear shaped I'll be kicking myself for the rest of my life, however long that might be)
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May 12, 2022 19:30
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Bremen posted:May I present to you the first trade on my account. Yeah, looks like you had a similar start. My understanding of everything is still kind of shaky but in a way I'm sort of glad I started just now since I guess it's a chance to get more assets for less. I'm actually really looking forward to the next purchases, and I kind of hope the markets keep going down until then.
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May 12, 2022 19:39
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Bremen posted:May I present to you the first trade on my account. Check your state's laws - in North Carolina, solar panels have to be connected to the grid, so they can't power your house if the power goes out (unless you're charging some kind of battery storage).
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May 12, 2022 20:10
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Mons Hubris posted:Check your state's laws - in North Carolina, solar panels have to be connected to the grid, so they can't power your house if the power goes out (unless you're charging some kind of battery storage). How much did this cost the utility companies to get put into law? It's obscenely blatant.
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May 12, 2022 23:37
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KillHour posted:How much did this cost the utility companies to get put into law? It's obscenely blatant. Connecting solar panels to the grid is generally far better for the homeowner and a net loss for the utility company - it lets you sell off the excess power (at a legally mandated high rate, at least where I live) and avoid needing a battery system, which would be quite expensive. It only really matters if you're trying to set up a power system to work if the power grid goes down, which doesn't really hurt the power company. That said, this might be getting off topic for the retirement thread. Then again, it might not - it effectively is a long term investment.
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May 13, 2022 00:01
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Bremen posted:(at a legally mandated high rate, at least where I live) Yeah, so that's the part that's changing a LOT.
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May 13, 2022 01:57
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Mons Hubris posted:Maybe this is reductive but if you actually have cash right now, isn’t this actually a good time to invest? Buy low sell high and all that? i get where you're coming from, but personality types prone to sitting out on the sidelines usually don't follow through with the buy part. if it's cheaper than it was yesterday, surely it will be even cheaper tomorrow. then they miss the bottom and then get scared that prices are now too high to buy. over on bogleheads forum i've seen people who got out of equities in 2008 and are still waiting for the right time to get back in
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May 13, 2022 05:33
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As far as wash sale rules go, there seems to be some IRS guidance that buying into an IRA would run afoul of wash sale rules. I'm well beyond 30 days from doing a Roth backdoor so that's not a problem, but I definitely am buying various index funds twice a month through a 401k and an HSA, and from what I can see there's no specific IRS guidance on those. Obviously not looking for financial advice ( ) but has anyone avoided trying to do some tax loss harvesting because of retirement account contributions?At the least I'm guessing I can do some extra legwork to find some good funds that aren't "substantially similar" or whatever to any holdings in my retirement accounts to ease my conscience if I wanted to try to harvest losses from my taxable accounts. But I'm just curious whether anyone here has worried about this in the past.
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May 13, 2022 16:51
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fourwood posted:As far as wash sale rules go, there seems to be some IRS guidance that buying into an IRA would run afoul of wash sale rules. I'm well beyond 30 days from doing a Roth backdoor so that's not a problem, but I definitely am buying various index funds twice a month through a 401k and an HSA, and from what I can see there's no specific IRS guidance on those. Obviously not looking for financial advice ( My opinion? Don't worry about it. 401k's being controlled by an administrator seems intentionally left out of the guidelines, but there are of course accountants who believe otherwise. But after decades of no guidance from the IRS and zero evidence of enforcement of this, I think worrying about this is not worth it.
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May 13, 2022 17:15
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KillHour posted:How much did this cost the utility companies to get put into law? It's obscenely blatant. Net Metering - Great for the individual home owner. Terrible for the utility, the distribution grid, home owner's without solar, renters, multifamily buildings, low income households, etc.
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May 13, 2022 17:19
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fourwood posted:As far as wash sale rules go, there seems to be some IRS guidance that buying into an IRA would run afoul of wash sale rules. I'm well beyond 30 days from doing a Roth backdoor so that's not a problem, but I definitely am buying various index funds twice a month through a 401k and an HSA, and from what I can see there's no specific IRS guidance on those. Obviously not looking for financial advice ( VTI vs VOO. Seems pretty straightforward most of the time to find different-enough funds. If you list what you have and what brokerage(s) you use, I imagine this thread should be able to list some options.
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May 13, 2022 17:30
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The intention of the wash sale rule is to disallow tax avoidance through brief, inconsequential sell-and-then-buy of an investment. Your tax-sheltered accounts like an IRA have no tax avoidance because there's no capital gains tax assessed within that sheltered space. You can't avoid taxes you would never have paid. I think if you did something like: Sell XYZ in your brokerage account, immediately buy that many shares of XYZ in your IRA, then 31 days later sell it in your IRA and buy it back in your brokerage account, you have technically used the IRA to perform a wash sale and gotten to tax loss harvest XYZ while never actually being out of the security. Don't do that. But if you're just... moving your stock holding from your brokerage account to your IRA, for long-term holding, that's fine. There's no "taxable basis" for the shares in the IRA because there's no future date on which you sell them and then look at the purchase price and calculate a short or long term taxable capital gain. Disclaimer: I'm not a lawyer or your lawyer, always obey the law, consult a professional if you have doubts.
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May 13, 2022 17:50
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Forgetting about your intention, the wash sale rule is very simple and clear, and is more about the timing and the "identical-ness" of the security you are rebuying. Leperflesh posted:I think if you did something like: Sell XYZ in your brokerage account, immediately buy that many shares of XYZ in your IRA, then 31 days later sell it in your IRA and buy it back in your brokerage account, you have technically used the IRA to perform a wash sale and gotten to tax loss harvest XYZ while never actually being out of the security. Right, that's pretty blatant... Leperflesh posted:But if you're just... moving your stock holding from your brokerage account to your IRA, for long-term holding, that's fine. There's no "taxable basis" for the shares in the IRA because there's no future date on which you sell them and then look at the purchase price and calculate a short or long term taxable capital gain. But that is still a wash sale IF you claimed a loss. Just because your intention was to hold it for the longterm doesn't change the very simple wash sale rule. IRS guidelines are clear. In fact, this is the worst thing you can do. If you do a wash sale in your taxable, it's actually not that bad since the wash is actually added to your basis of the replacement shares for when you eventually sell. If you do the IRA as a wash, you have no basis, as you said, which means you never get that loss back. Again, a pretty clear case that is often talked about in tax circles. fourwood is talking about 401k's, not IRA's. In 401k's, you can just leave your contributions as-is and not overthink what you are doing in your taxable account. The IRS specifically left 401k's out for this reason... it's somewhat controlled by an administrator, designed to be set-it-and-forget-it, and have no history of going after anyone who does this. 80k fucked around with this message at 17:58 on May 13, 2022 |
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May 13, 2022 17:56
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https://www.irs.gov/pub/irs-pdf/p550.pdf see page 56
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May 13, 2022 18:05
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OK I see: If I sold XYZ at a loss in my brokerage account (because it's temporarily below my cost basis), and claim a loss, but buy XYZ in my tax sheltered space and it subsequently goes up, then I can't claim a loss because it is a wash sale.quote:You cannot deduct losses from sales or trades A plain reading seems to be that you simply don't get to deduct the loss on your taxes, but you can still do the sale, and you don't adjust the cost basis in (4). But 401(k)s aren't mentioned at all. The implication is that you treat them like a normal account and adjust cost basis, even though cost basis is irrelevant within a 401(k)? Or, are we to understand that the IRS does not consider it a wash sale at all?
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May 13, 2022 18:55
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Leperflesh posted:But 401(k)s aren't mentioned at all. The implication is that you treat them like a normal account and adjust cost basis, even though cost basis is irrelevant within a 401(k)? Or, are we to understand that the IRS does not consider it a wash sale at all? The IRS has no guidelines, so there are really no implications. Practically speaking, you almost certainly will not be in trouble leaving some automatic contributions going during the time a loss is taken in your taxable account. My opinion is... just don't worry about it at all. The IRS excluded 401k's for a reason, presumably to avoid this headache on an account that they expect most people not to think about, and has had decades to make guidelines on it, and choose not to worry about it. I suggest we all do the same and don't worry about it.
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May 13, 2022 19:02
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Hmm. OK
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May 13, 2022 19:08
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That's interesting, I didn't realize that. I explicitly avoided using the same funds in my taxable and 401k just to prevent the automatic contributions from causing a wash sale. I guess that was not at all necessary.
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May 13, 2022 20:09
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Since we're talking taxes, here's a hypothetical sequence: Contribute to Roth in 2021 Contribute to Roth in January, 2022 Recharacterize part of the 2021 Roth contribution to a new Trad IRA in 2022 before tax day (April 18) because they were over the Roth limit Recharacterize all of the 2022 Roth contribution to that same Trad IRA in 2022 after tax day (April 18) because they were over the Roth limit The person has no other IRAs. After doing all that, can the person convert the entire T-IRA to the Roth in 2022 without any weird tax gotchas? I presume there would be taxes to pay on part/all of the conversion, but not double or ongoing taxes somehow, right?
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May 13, 2022 20:31
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pmchem posted:Since we're talking taxes, here's a hypothetical sequence: I'm pretty sure this is OK. There used to be a waiting period for certain types of recharacterizations that no longer apply and people still remember them. But there shouldn't be any rule now. Honestly, I would probably lose sleep hoping the 1099-R's are not messed up next year, but there shouldn't be any issue doing what you are proposing.
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May 13, 2022 21:51
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Turns out I’m a big dummy and my 401k is all in a target date fund anyway.  Then my HSA is in total market and my taxable brokerage is all in VOO, so pretty sure I’m covered on going VOO->VTI, since nothing in my retirement funds is a 500 Index fund to be identical to VOO on any automated purchases coming up. Probably should have figured this out first but it sounded like an interesting discussion and I think that panned out, so thanks y’all.
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May 13, 2022 22:58
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I was looking into tax loss harvesting and surprised to learn that it’s not a slam dunk that it’s a good thing. Good explanations here. https://rationalreminder.ca/podcast/158quote:But you're selling this thing at a loss, which means when you re-buy in the new asset, whatever it is, your cost basis on the new asset is going to be the same as your sale proceeds from what you just sold, which means effectively, because the thing that you sold had a higher cost base, which is why it was at a loss, when you do the re-investment, you're reducing your adjusted cost base relative to if you had not done this procedure. A lower adjusted cost base means when you eventually sell that asset in the future, you're going to have to pay the tax on that amount. So even though you're getting an immediate tax savings by triggering this loss, you're creating a larger future tax liability that should directly offset your immediate tax savings. The difference is in the timing. quote:Tax deferral is a good thing. Don't get me wrong, I'm not saying that tax loss selling is bad because it's just a deferral. Deferring tax is good. quote:Now, in my example, I'm assuming that this person has capital gains to offset. If that's not true and you're just triggering losses for the sake of triggering losses, you can carry those losses forward, but they're not going to do anything for you. quote:That's one of the things that comes up when you start digging into when does tax loss selling make sense, one of the criteria is if you're doing a lot of trading. So if you have an actively managed strategy and you are realizing a bunch of gains, then this whole process becomes more compelling, but if you're a buy and hold index investor and you're almost never realizing gains, that diminishes a lot of that.
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May 14, 2022 11:37
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Leperflesh posted:I have no idea if this is accurate but it seems to be circulating: This is like posting Q garbage.
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May 14, 2022 12:03
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doingitwrong posted:I was looking into tax loss harvesting and surprised to learn that it’s not a slam dunk that it’s a good thing. Good explanations here. https://rationalreminder.ca/podcast/158 In addition to what he says, I have in mind that any capital gains tax that I pay while I'm working is likely to be higher than the 0% rate that I'll likely be paying after retirement (I'm married and don't expect to have an income higher than ~$80k after retirement, even accounting for the 401k). So, if I harvest now and carry those losses forward to the year I retire, sell my house, and move, I'd expect them to help offset gains realized then. If I were to instead just sit tight without harvesting, I'm not really expecting to benefit from offsetting gains in the future. I may have some of the above wrong, and would welcome criticism if so. But I think this would be an instance of deferring taxes possibly turning into not having to pay the taxes at all. Ersatz fucked around with this message at 14:43 on May 14, 2022 |
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May 14, 2022 14:06
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icecastle posted:This is like posting Q garbage.
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May 14, 2022 15:18
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moana posted:Cool, please post the real explanation of what happened instead to enlighten the rest of us. hmm, the burden of proof should not be to explain a mystery if you're pointing out that something is just 4chan conspiracy-theory bait. "The sky is flashing lights because of aliens fighting Russia!!" "No that's conspiracy theory garbage" "Well why then?" <poster doesn't know the physics of aurora borealis so can't quickly explain it> as actual related content, coindesk is posting denials by all parties: https://www.coindesk.com/markets/20...h-ust-collapse/
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May 14, 2022 16:39
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Like all conspiracy theories, this one doesn’t even make sense when you think about it for 5 seconds. What is Blackrock’s motivation for trying to crash these coins?
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