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Old 12-05-2015, 01:40 PM   #21
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So, based on that, I should go ahead and take the $44K of LT cap gain distributions, use my $200K of losses to offset it and I am further ahead then with little tax issues?
No. I think that was bad advice misunderstood. You told us if you sell now, then you will realize a loss. By realizing a loss now before the distribution, you get other taxpayers to help pay you for your loss. Sell now before the distribution and increase your carryover losses from around $200K to $225K and use them wisely in the future.

And folks in the 39.6% marginal income tax bracket pay qualified dividend taxes at something like 23.8% (not 15%, not 20%) and non-qualified dividends at 39.6%.

While you won't pay that on the LTCG distribution if you get it after you sell because you will end up selling by $44K less (get it? Paid $44K LTCG, fund drops $44K simultaneously, you sell for loss of $44K+$25K), it is that dividend distribution that you don't want that will be paid at the same time.
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Old 12-05-2015, 02:59 PM   #22
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No. I think that was bad advice. .

Wasn't advice but a statement of fact that the carried losses will take care of the CG distribution so no concern should be warranted. See post #19 for my advice. I agree with your conclusion.
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Old 12-05-2015, 03:08 PM   #23
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Wasn't advice but a statement of fact that the carried losses will take care of the CG distribution so no concern should be warranted. See post #19 for my advice.
Only the long-term cap gain distribution. Won't help with shirt-term cap gain dist or any non-qualified dividends which Wellesley will certainly be paying out a good chunk since it is 60% bonds.

Short-term cap gain dists from mutual funds are a problem, because they are always treated as ordinary income by the 1040D - you never get to apply them against cap losses.

They may be a small percentage of the total dist, since they usually are, but since Vanguard doesn't specify the breakdown between short and long in their estimate doc, this is an unknown. Well, OK, they say that info will be released on Dec 11.

But by selling ahead, the poster can guarantee everything will be treated as a capital loss.
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Old 12-05-2015, 04:14 PM   #24
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Wasn't advice but a statement of fact that the carried losses will take care of the CG distribution so no concern should be warranted. See post #19 for my advice. I agree with your conclusion.
Sorry, changed my response.
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