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Those could be considered gray areas, and I like to avoid gray areas when it comes to the IRS. They haven’t said a transaction in a 401 could trigger a wash sale, but they haven’t said it can’t, either. Regarding the Roth, the only way it could cause an issue is with automated reinvestment of dividends. If you’re doing that, you could have the dividends auto reinvested in a different fund. turbotax discounts vanguard Or am I sweating small stuff when all that matters is that I not do anything to trigger a wash sale. Though this post is a bit dated, I saw the link to this article on your Facebook group today so I hope it’s not too late to comment with a question. Any surprises or forgotten income sources could foul things up, although you’d only owe tax on the overage — not all of the gains you take.
Next week, dividends will hit my money market fund, and I’ll invest them in one fund of my choosing. That ~0.5% of my taxable account may be in cash for a couple days, but that’s a small sliver of the portfolio, and it’s certainly not in cash for 90 days. My question is, how can you synchronize the tax loss harvesting if I have a taxable account with a roboadvisor and Roth in vanguard? What you want to avoid in the 30-day window before and after tax loss harvesting is a wash sale.
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You do make some good points about understanding your own situation before blindly tax loss harvesting, but you also need to be careful with making assumptions. I just realized that around the same time in my other 403 and 457 accounts there were some shares bought of another similar or the same bond index fund from dividend reinvestment. First, you can deduct $3,000 in ordinary income per year for the losses you take. That saves you at your marginal state and federal income tax rates, which are almost certainly quite a bit higher than LTCG tax rates. Selling VTSAX did not create a wash sale, since I sold all shares I had acquired within the 30-day period. What is the basis for the claim that purchasing inside of a 401, 403, 457, etc. constitutes a wash sale? The IRS has only identified IRA and Roth IRA as no-no’s when it comes to buying a substantially similar security within 30 days.
I simply exchange from one mutual fund to another, and the swap takes place at the end of the trading day. For example, if you sell 100 shares https://turbo-tax.org/ at a loss and you automatically invested or reinvested in 10 shares, you can still take the loss on 90 of those 100 shares you had sold.
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In terms of TurboTax Online, because your credit card is charged at the moment you decide to e-file, there are no returns offered on any of the online versions of TurboTax’s products. I have both a mutual fund account that holds 99% of my taxable investments at Vanguard and a separate brokerage account with the BRK.B. You can “upgrade” to a merged account — details here.
If you have held the fund that paid the dividend for fewer than 60 days when you sell, the qualified dividends would be considered ordinary dividends. The tax treatment is less favorable, but you’re generally talking about a few dollars difference or dozens of dollars unless you’re trading multiple six-figures. If your brokerage allows you to use “unsettled funds” to purchase a new fund with the proceeds of the one you just sold, this is a minor issue. However, if you had to wait for the funds to settle, you could miss out on a day or two of market action, and that could cost you. With ETFs, you’ll likely have many more trading partners to choose from.