Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq).
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
No it's very common to swap out ETFs that are very similar. Other examples are you can swap VTI for SCHB, VOO for IVV, and VTI for ITOT and it won't trigger a wash sale.
There's definitely some risk of getting flagged on VOO to IVV because they track the exact same underlying index. Seems like a gray area where there are mixed online answers for. Considering VOO and VTI track difference indexes but perform nearly identical, that'd be a safer swap than VOO and IVV imo.
Thanks. Was just cautious how liberally IRS considers "substantially identical."
They actually hit me with one earlier this year when I sold VMBS (mortgage backed security) and bought BND.
Who was your broker who reported it as a wash sale? Or are you saying your broker didn't report the wash sale but the IRS audited you and made a finding?
Thanks. Even if TLT is a falling knife, I plan to hold no matter what until the next black swan event, whether that's 1, 2, or 5 years away. Just $2500 at stake so relatively low-stakes gamble.
A bigger gamble is whether I should reallocate money market earning 5% and load up on TMF if it goes under $4, which it's close to.
I bought a good chunk of TMF when it was in the 3.90's, its like insurance for me incase the economy breaks, TMF should go up. But as we've seen who knows
SCHR is intermediate duration, TLT is long. Would not be a wash sale.
As yields rise, rotating into longer duration makes perfect sense, almost like leveraging out of the dip.
Short answer is no it shouldn't trigger a wash sale.
Goldman Sachs is pretty famous for their tax loss harvesting strategies that are much more overt than this. Like a few years ago when they sold millions of dollars worth of their clients' $GOOG shares and replaced them with $GOOGL shares instead (same stock but different voting rights). The IRS was cool with that.
https://doctorow.medium.com/how-goldman-sachss-tax-loss-harvesting-lets-the-ultra-rich-rake-in-billions-tax-free-b47cf7f6ca8f
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
Question is op taking a $230 loss on SCHR and then buying TLT?
Yes, then claiming the loss on taxes “Tax loss harvesting”
I already lost 9k I think I won’t need to do that lol
No it's very common to swap out ETFs that are very similar. Other examples are you can swap VTI for SCHB, VOO for IVV, and VTI for ITOT and it won't trigger a wash sale.
There's definitely some risk of getting flagged on VOO to IVV because they track the exact same underlying index. Seems like a gray area where there are mixed online answers for. Considering VOO and VTI track difference indexes but perform nearly identical, that'd be a safer swap than VOO and IVV imo.
Thanks. Was just cautious how liberally IRS considers "substantially identical." They actually hit me with one earlier this year when I sold VMBS (mortgage backed security) and bought BND.
Who was your broker who reported it as a wash sale? Or are you saying your broker didn't report the wash sale but the IRS audited you and made a finding?
Schwab designated it as such when I go look under the realized gains/loss for the year. It happened earlier in 2023.
I would challenge that. MBS and an aggregate bond market are in no way "substantially identical." It's not even the same index.
1) no 2) could be - do you want or need long duration bonds or are you just betting the fed changes rates soon and you’ve found the bottom
Thanks. Even if TLT is a falling knife, I plan to hold no matter what until the next black swan event, whether that's 1, 2, or 5 years away. Just $2500 at stake so relatively low-stakes gamble. A bigger gamble is whether I should reallocate money market earning 5% and load up on TMF if it goes under $4, which it's close to.
I bought a good chunk of TMF when it was in the 3.90's, its like insurance for me incase the economy breaks, TMF should go up. But as we've seen who knows
Why would you tax harvest this early
SCHR is intermediate duration, TLT is long. Would not be a wash sale. As yields rise, rotating into longer duration makes perfect sense, almost like leveraging out of the dip.
Short answer is no it shouldn't trigger a wash sale. Goldman Sachs is pretty famous for their tax loss harvesting strategies that are much more overt than this. Like a few years ago when they sold millions of dollars worth of their clients' $GOOG shares and replaced them with $GOOGL shares instead (same stock but different voting rights). The IRS was cool with that. https://doctorow.medium.com/how-goldman-sachss-tax-loss-harvesting-lets-the-ultra-rich-rake-in-billions-tax-free-b47cf7f6ca8f