How Much Tax Loss To Harvest?

[Chahta]

@slooow , yes that got me to the tune of $4.47  this year. As I book losses or gains Schwab conveniently displays them for me, wash sales and all.

Otherwise book as much as possible while you can!

[yogibearbull]

Chahta , good point. Reinvestments may produce tiny inconsequential amounts of wash sales and those are accounted for (or noted) by brokers. Schwab is better at this, Fido so-so (it flags but you have to make adjustments manually), and I don't know about Vanguard (I am new there).

Another point to remember is that disallowed wash sale losses are just deferred/delayed in most cases, not lost. Exceptions may be with wash sale situations created among taxable and tax-deferred/free accounts and some other complicated situations.

TLH is a freebie available to all in taxable accounts. If you have an unrealized tax loss, don't just sit on it, do something. After all, there are more ETFs and mutual funds now than stocks and one can find something "similar but not identical" (but not "too similar" - e.g. options or another class or same index by another vendor).

[steadyeddy]

Given that we are in a unique bear market where both bonds and stocks are significantly injured, there is no hurry to realize TLH this year; I suspect there would be continued opportunities in 2023 as well. Thoughts?

Let us say, I have already realized TLH of $20K - and there is room for realizing TLH worth another $20K. Wait or Act??

[Chahta]

Right on steadyeddy.

Either way don’t let them get away. Think about cancelling $3000 of income for many years to come. Investing can pay more benefits than CGs.

[ECE Prof]

Yogi “Fido so-so (it flags but you have to make adjustments manually), and I don't know about Vanguard (I am new there).”

Fido does a good job, as far as I know. FIDO keeps tab on your new activity also, and provides Wash Sale info. Vanguard also does a good job. You go to “COST Basis” and get the screen in “Realized Gains” and choose the accounts. For taxable accounts, you will see a summary, and expand for each security. Even on the summary page, you will see “i” for wash sales in the Vanguard website. When you expand, you will see the actual amount to be added to your loss for wash sale.

There is one important difference between Vanguard and FIDO. The summary page of FIDO includes the Wash sale amount, and so, you need not expand (another reason to move to FIDO). However, for dates, you need to expand. In Vanguard, you need to copy the Wash sale amount also and do the calculation on your spreadsheet.

FIDO lists these values as you would enter in 8949 forms directly (another reason to move to FIDO).  However, in Vanguard, you need to interchange the columns of dates and cost basis. It is a lot of work involved after you copy and past in your spreadsheet. If you use MSFT excel, I do not know how the copy will result. But, in LibreOffice, you can use “Paste Special” and use “formatted” forms where you can select the right punctuations, and it will provide a beautiful form of results. Then, you can manipulate and enter the values row by row in your 8949 sheets. In fact, I select 20 rows at a time for each sheet and paste all at once. I have used two sheets of 8949 so far (40 trades), including TLH, and reduced it below $3000 limit now by realizing some gains selling IVV last Monday.

Since I also have Quicken, I can list the details immediately on the same day. I send the results to the spreadsheet, and the columns will correspond to 8949 sheet. I use this to crosscheck. You have to enter the Wash sale info separately in Quicken, which is somewhat cumbersome. So, I do not do that.

Since I have a separate spreadsheet keeping the tabs on the gains/losses every year, I just update the results and add it to the 8949 sheet in the 1040 spreadsheet tax return. You can use Tax Hawk for a hypothetical tax return for an accurate estimate of your taxes and keep updating the results.

[dh]

Hello All.
Would TLH  among Pimco Cefs PDI,PDO,PTY trigger wash sale violations?  For Example: Selling PTY and buying PDO. Are these Cefs too identical? I am currently (long) holding PTY and PDI. Or:Could I buy PDO now, hold for 31 days and then sell PTY for TLH? Thank you-Don

[ECE Prof]

Nov 7, 2022 2:27:46 GMT dh said:

Hello All.
Would TLH  among Pimco Cefs PDI,PDO,PTY trigger wash sale violations?  For Example: Selling PTY and buying PDO. Are these Cefs too identical? I am currently (long) holding PTY and PDI. Or:Could I buy PDO now, hold for 31 days and then sell PTY for TLH? Thank you-Don

I do not think so. They are not identical anyway. Besides, all the IRS algorithms will check for the letters, and if they are different, it would not matter to IRS. So, in conclusion, it appears that you are on the safe ground. However, if you are long, why do you want to do this? It baffles my mind.

[yogibearbull]

PDI, PDO, PAXS share Ivascyn and Murata, and have somewhat similar strategies, but they aren't identical. So, TLH swaps among them are OK. The main difference in the trio is that PDO and PAXS have term-structures with lives of 12.0-13.5 years, while PDI has an indefinite term.

[Deleted]

EWJ for EWJV - swapped these.  Think I am okay with wash sale - same index, but different mix. 

Also sold some MMM - had replaced funds earmarked to portion with CVX.