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Old 11-23-2008, 08:33 AM   #21
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This will hopefully clarify it: Tax Loss Harvesting - Bogleheads

DD
Thanks for the link...I saved it..It does help some but the example does not take into effect the costs of commissions. If you subtract the cost of commissons from what is sold and reinvested, assume a likely higher tax rate than 15%, and consider the commissions of purchases made with the money saved from income taxes the numbers would be much different, especially in my case where I have many small stock holdings that would need to be sold.
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Old 11-23-2008, 09:35 AM   #22
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You are missing that all these ETFs pay about a 2% or so dividend. You were gonna pay taxes on a distribution whether you exchanged into other ETFs or not. The ETFs are not giving out cap gains distributions.

As for the future, with all the carryover capital losses, we won't be paying any taxes in our early retirement as we sell equities to fund our expenses.
Yep, I overlooked the ETF angle as I was thinking about a tax loss/reinvest strategy for some of my mutual funds..A bit different-same concept.
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Old 11-23-2008, 09:37 AM   #23
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Thanks for the link...I saved it..It does help some but the example does not take into effect the costs of commissions. If you subtract the cost of commissons from what is sold and reinvested, assume a likely higher tax rate than 15%, and consider the commissions of purchases made with the money saved from income taxes the numbers would be much different, especially in my case where I have many small stock holdings that would need to be sold.
My 3 trades to do the switch cost $20. That is lost in the fog of the trade. I actually did a little day trading when I did it. The market was falling when I sold the SPY and IWD. When those sales registered, I bought the VTI for about 10 cents/share under what it was when I started selling.
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Old 11-23-2008, 06:00 PM   #24
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Thanks for the link...I saved it..It does help some but the example does not take into effect the costs of commissions. If you subtract the cost of commissons from what is sold and reinvested, assume a likely higher tax rate than 15%, and consider the commissions of purchases made with the money saved from income taxes the numbers would be much different, especially in my case where I have many small stock holdings that would need to be sold.
You do have to take trading costs into consideration. There was a poll over at Bogleheads where I think that most were not locking in anything less then about $500 worth so the trading costs become minimal. Your tax bracket also makes a big difference...

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