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Tax Loss Harvesting Support Group

Posted: Wed Oct 24, 2018 7:58 am
by sophie
I assume several of us have some tax loss harvesting opportunities, but as always:

1) When do you pull the trigger?

2) Hold the sale money in cash for 31 days, or park funds temporarily in a different stock investment?

It would be nice to have a collective set of votes to decide!

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 12:18 am
by Kbg
1. Before the tax year is over and 6 market days before the last trading day of the month. Why, markets tend to outperform during a window around the end of the month. Or any worse than normal market day decline...like yesterday. This is one of the very few times you want to maximize a loss...

2. Doesn’t matter if you can’t predict the future.

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 9:55 am
by Ugly_Bird
Kbg wrote:
Fri Oct 26, 2018 12:18 am
2. Doesn’t matter if you can’t predict the future.
I guess this is the biggest potential problem regarding loss harvesting: hoping that nothing drastic happens during 31 days.

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 10:04 am
by buddtholomew
Ugly_Bird wrote:
Fri Oct 26, 2018 9:55 am
Kbg wrote:
Fri Oct 26, 2018 12:18 am
2. Doesn’t matter if you can’t predict the future.
I guess this is the biggest potential problem regarding loss harvesting: hoping that nothing drastic happens during 31 days.
There’s no reason to wait the 31 days.
There are many similar but not equal substitutes.

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 1:18 pm
by Ugly_Bird
buddtholomew wrote:
Fri Oct 26, 2018 10:04 am
Ugly_Bird wrote:
Fri Oct 26, 2018 9:55 am
Kbg wrote:
Fri Oct 26, 2018 12:18 am
2. Doesn’t matter if you can’t predict the future.
I guess this is the biggest potential problem regarding loss harvesting: hoping that nothing drastic happens during 31 days.
There’s no reason to wait the 31 days.
There are many similar but not equal substitutes.
OK. What that would be, say, for IAU?

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 1:35 pm
by buddtholomew
Ugly_Bird wrote:
Fri Oct 26, 2018 1:18 pm
buddtholomew wrote:
Fri Oct 26, 2018 10:04 am
Ugly_Bird wrote:
Fri Oct 26, 2018 9:55 am


I guess this is the biggest potential problem regarding loss harvesting: hoping that nothing drastic happens during 31 days.
There’s no reason to wait the 31 days.
There are many similar but not equal substitutes.
OK. What that would be, say, for IAU?
GLD; you’re not comfortable with the low trading volume in IAU

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 2:06 pm
by Xan
buddtholomew wrote:
Fri Oct 26, 2018 1:35 pm
Ugly_Bird wrote:
Fri Oct 26, 2018 1:18 pm
buddtholomew wrote:
Fri Oct 26, 2018 10:04 am


There’s no reason to wait the 31 days.
There are many similar but not equal substitutes.
OK. What that would be, say, for IAU?
GLD; you’re not comfortable with the low trading volume in IAU
That sounds pretty dicey to me. I'd say that switching from an open-ended fund like GLD or IAU to a closed-end fund like PHYS would be more of a different investment.

Re: Tax Loss Harvesting Support Group

Posted: Fri Oct 26, 2018 4:25 pm
by buddtholomew
Xan wrote:
Fri Oct 26, 2018 2:06 pm
buddtholomew wrote:
Fri Oct 26, 2018 1:35 pm
Ugly_Bird wrote:
Fri Oct 26, 2018 1:18 pm


OK. What that would be, say, for IAU?
GLD; you’re not comfortable with the low trading volume in IAU
That sounds pretty dicey to me. I'd say that switching from an open-ended fund like GLD or IAU to a closed-end fund like PHYS would be more of a different investment.
IRS rules are up for interpretation when it comes to loss harvesting/wash sales. Different CUSIP, different provider, expense ratio, liquidity, options availability and so on...

Re: Tax Loss Harvesting Support Group

Posted: Sat Oct 27, 2018 7:58 am
by sophie
If you're tax loss harvesting from a gold ETF, you could buy physical gold. The wash sale rules don't apply in that case.

I ended up selling a bond fund yesterday, and due to an autoinvestment will have to wait another couple of weeks to sell the rest. I'm replacing the bond fund with long bonds bought on secondary market.

An interesting tidbit: TLT and FLBAX/FLBIX are both long Treasury funds, but they track different indexes (Barclay as opposed to ICE). Would that be different enough for IRS purposes??? Similarly, FLBAX is a mutual fund while TLT is an ETF - is that sufficient by itself?

Re: Tax Loss Harvesting Support Group

Posted: Sat Oct 27, 2018 9:55 am
by ochotona
sophie wrote:
Wed Oct 24, 2018 7:58 am

1) When do you pull the trigger?
A new 52-week low is a pretty strong inducement. Or hitting the bottom of the Bollinger band on a weekly or monthly chart.

Re: Tax Loss Harvesting Support Group

Posted: Sat Oct 27, 2018 5:58 pm
by Kbg
sophie wrote:
Sat Oct 27, 2018 7:58 am
If you're tax loss harvesting from a gold ETF, you could buy physical gold. The wash sale rules don't apply in that case.

I ended up selling a bond fund yesterday, and due to an autoinvestment will have to wait another couple of weeks to sell the rest. I'm replacing the bond fund with long bonds bought on secondary market.

An interesting tidbit: TLT and FLBAX/FLBIX are both long Treasury funds, but they track different indexes (Barclay as opposed to ICE). Would that be different enough for IRS purposes??? Similarly, FLBAX is a mutual fund while TLT is an ETF - is that sufficient by itself?
Don’t future taxes then move to 28% for collectibles?

Re: Tax Loss Harvesting Support Group

Posted: Sat Oct 27, 2018 8:15 pm
by ochotona
You could sell a Large Cap fund to harvest losses, and temporarily dive into a US Total Stock Market fund to avoid a wash sale. I've heard those kinds of exchanges are different enough to not raise anyone's eyebrows.