Rebalancing within an IRA

[rkser]

With the recent Volatile Market I have made few transactions within our IRAs towards rebalancing.

To my understanding, a Wash Sale Rule does not apply as both buy & sell transactions are being made in an IRA, as opposed to one or both of the transactions are being made in taxable account.

A IRA generally does not have a basis & the loss is not reported to IRS by Vanguard. Likewise a Cap Gain also is not applicable in a IRA.

Am I correct, please advise. Thankyou in advance

 

[N02L84ER]

You are correct. Wash sales apply when the loss happens in a taxable accounts, not in tax deferred (IRA, 401k) or tax free (Roth) accounts. If you were to sell in a taxable account for a loss and within 30 days of that transaction, you purchase the same or similar fund in any other account (taxable, tax deferred, or tax free), the wash sale rules do apply.

 

[captain3d]

You have no tax loss or gain inside an IRA. If you can not get an advantage they don’t care

 

[big-papa]

With the recent Volatile Market I have made few transactions within our IRAs towards rebalancing.

To my understanding, a Wash Sale Rule does not apply as both buy & sell transactions are being made in an IRA, as opposed to one or both of the transactions are being made in taxable account.

A IRA generally does not have a basis & the loss is not reported to IRS by Vanguard. Likewise a Cap Gain also is not applicable in a IRA.

Am I correct, please advise. Thankyou in advance

Correct - Note that if you hold mutual funds, be aware of frequent trading rules your brokerage house might have if you purchase/sell the same fund within a 30 day window.

 

[rkser]

Correct - Note that if you hold mutual funds, be aware of frequent trading rules your brokerage house might have if you purchase/sell the same fund within a 30 day window.

Does the frequent trading rule apply in case of trading ETFs ?

Thanks to everybody for clarifying my understanding !!

 

[oldtimer]

Does the frequent trading rule apply in case of trading ETFs ?

Thanks to everybody for clarifying my understanding !!

At Vanguard the answer is no.
https://personal.vanguard.com/us/whatweoffer/overview/redemptionpolicy

Frequent-trading policy

If you sell or exchange shares of a Vanguard fund, you will not be permitted to buy or exchange back into the same fund, in the same account, within 30 calendar days. However, this rule does not apply to:

• Vanguard money market and short-term bond funds (with the exception of Vanguard Short-Term Inflation-Protected Securities Index Fund).
• Vanguard ETF® Shares.
• Discretionary transactions through Vanguard Personal Advisor Services and Vanguard Institutional Advisory Services.
• Purchases of shares with fund dividends or capital gains distributions. For example, if you reinvest dividends or capital gains, these purchases will not be blocked even if shares in the fund were sold or exchanged within the previous 30 days.
• Transactions made through Vanguard's Automatic Investment Plan, Automatic Exchange Service, Direct Deposit Service, Automatic Withdrawal Plan, Required Minimum Distribution Service, and Vanguard Small Business Online®.
• Sales of shares by Vanguard to pay fund or account fees.
• Transfers and reregistrations of shares within the same fund.
• Purchases of shares by asset transfer or rollover.
• Conversions of shares from one share class to another in the same fund.
• Sales of shares through checkwriting.
• Section 529 college savings plans, certain approved institutional portfolios and asset allocation programs, as well as trades made by funds or trusts managed by Vanguard or its affiliates that invest in other Vanguard funds. (Please note that shareholders of Vanguard's funds of funds are subject to this policy.)

 

[rkser]

At Vanguard the answer is no.
https://personal.vanguard.com/us/whatweoffer/overview/redemptionpolicy

Thankyou Sir !