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Substantially Identical
Old 12-12-2015, 10:06 PM   #1
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Substantially Identical

If the market goes down in the next 2 weeks I may want to sell my VOO for tax loss harvesting and then immediately buy VTI. I believe VOO tracks the S&P 500 while VTI represents the entire domestic stock market so they shouldn't be substantially identical, right? I'm new to taxable investing so any advice would be welcome. Thanks

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Old 12-12-2015, 10:09 PM   #2
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my uneducated guess is that it won't be a wash sale

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Old 12-12-2015, 10:09 PM   #3
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The IRS does not provide great examples, but those should be different enough from what I've heard
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Old 12-13-2015, 05:59 PM   #4
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I suggest a little tax arbitrage because of different ex-dividend dates for some ETFs. Since VV is a great replacement for VTI and not substantially identical, VTI and VV are a great tax-loss harvesting pair. But wait! There's more!

VV goes ex-dividend on 12/17 while VTI & VOO go ex-dividend on 12/21. So one can avoid the dividend distribution of both VTI and VV if one sells VTI on 12/17 or 18 and buys VV then. If one has lots of shares of VTI, this could save you some more money on taxes.

Actually, this is such a good idea, I think I am going to do it myself.
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Old 12-14-2015, 05:59 PM   #5
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You will be safe, they are drastically different.

If you buy and sell the same identical fund in 2 different accounts like regular accnt and ira or 401K account that would be an issue.
Or if you could find 2 funds that held the same stocks and the same number of stocks in slightly different proportions that would also be an issue.

Just my opinion.
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