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Old 10-28-2020, 04:18 PM   #21
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The only reason we don't sell, is taxes - we've owned these funds for 20+ years. It's durned if you do, durned if you don't.
I was facing that, but the big drop earlier in the year was an opportunity to switch to a fund with lower distributions without incurring large capital gains. In fact I had a loss. While I don't like losing money, a cap loss is a useful thing to have when controlling income. Putting the money in a new fund let me take part in the recovery. Now that one is a fund I'd rather not sell because of the gains, but that's ok.

I don't know that I had 20 years in that other fund, but it was over 10.
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Old 10-28-2020, 05:22 PM   #22
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That's exactly what we've been doing. There always seems to be some year-end expense that absorbs the year-end distro (minus taxes, set aside).

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Just keep taking the distributions in cash, and eventually your unrealized gains in the fund will be small enough to sell the rest. .
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Old 10-28-2020, 05:33 PM   #23
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We did our Roth conversions when the market tanked earlier this year. Even though we’ve paid a bunch of taxes already this year, we’re going to have to fork out another estimated $35k on April 15. First world problems, I know.
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Old 10-28-2020, 07:52 PM   #24
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That's exactly what we've been doing. There always seems to be some year-end expense that absorbs the year-end distro (minus taxes, set aside).
Mine generally get moved to other more tax efficient funds as I rebalance, but of course I take my annual withdrawal in Jan and then rebalance, so it’s hard to say where anything “goes”.

I just got info for a couple of legacy funds paying out large cap gains dists. I have gotten rid of most bad actors, but there are still some that delivery a nasty surprise now and then. I have a couple of funds with ginormous unrealized gains, and those are the culprits giving back big taxable chunks this year. Still, overall, this year looks to be a huge improvement compared to the last few, and I have some harvested losses to offset part of the gains.
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Old 10-29-2020, 07:34 PM   #25
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Unfortunately it looks like Wellington (VWENX) is going to be close to $4 a share.
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Old 10-30-2020, 05:44 AM   #26
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Our VWENX is in our (very small) Roths, so that's OK for us.

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Unfortunately it looks like Wellington (VWENX) is going to be close to $4 a share.
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Old 10-30-2020, 07:01 AM   #27
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Oh, the fund I was worried about just posted a cap gains estimate over $12 a share!
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Old 10-30-2020, 07:37 AM   #28
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Oh, the fund I was worried about just posted a cap gains estimate over $12 a share!
Ouch! I hope you only have 5 shares. But I'm guessing that's not the case.
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Old 10-30-2020, 07:54 AM   #29
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Nope. I’m afraid it’s going to be bigger than last year which was already large. This fund has appreciated the most of my holdings. For many years it paid out almost no cap gains, then the last few years it started paying out increasingly large gains.
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Old 10-30-2020, 08:24 AM   #30
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% of share price is a better measure of distribution impact than raw $ amount.

I noticed that VG PRIMECAP is at 7.7% realized cap gains as of 9/30/2020. I used to hold a lot of that.
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Old 10-30-2020, 08:31 AM   #31
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Sure. It’s 11% of NAV. I assume that’s based on the 9/30 price, they don’t actually say.
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Old 10-30-2020, 09:09 AM   #32
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Sure. It’s 11% of NAV. I assume that’s based on the 9/30 price, they don’t actually say.
Wow, that's crazy.

I looked at the distribution tab for VG funds on their pages to see what the realized cap gain is so far, and as of which date. I guess they might be able to harvest some losses before the end of the year to reduce the pain.
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Old 10-30-2020, 09:35 AM   #33
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Wow, that's crazy.

I looked at the distribution tab for VG funds on their pages to see what the realized cap gain is so far, and as of which date. I guess they might be able to harvest some losses before the end of the year to reduce the pain.
Yeah, calculating the estimated distribution, it’s a whopper, and almost 2x last years. But I have a 275% gain in the fund, so what can I say? My cost basis is quite low. I had already gotten rid of the higher cost basis shares a while back.

It’s actually not the biggest distribution I’ve had paid out in the past. I got rid of the worst culprits already.
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Old 10-30-2020, 02:21 PM   #34
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Sound like these outsized capital gains distributions may cause a lot of people to fall over the ACA subsidy cliff.... especially those who are not paying close attention.
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Old 10-30-2020, 04:51 PM   #35
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Sound like these outsized capital gains distributions may cause a lot of people to fall over the ACA subsidy cliff.... especially those who are not paying close attention.
That was my chief concern - ran some numbers last night and I'll barely squeak under 400% FPL based on current figures. Not much more and I'd have to pay back $9600 in subsidies.

Looks like the cliff this year is $67,640 for a family of two if I'm not mistaken.
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Old 10-31-2020, 02:06 PM   #36
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An imperfect solution to large unrealized MF cap gains that has been of some help for us is to use them as a primary source for donation to our Fido DAF. I have this issue with our VG Prime cap and now am down to only a couple hundred shares.
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Old 10-31-2020, 05:03 PM   #37
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% of share price is a better measure of distribution impact than raw $ amount.

I noticed that VG PRIMECAP is at 7.7% realized cap gains as of 9/30/2020. I used to hold a lot of that.


Can you give me an example of how this is calculated mathematically? I have an American fund that estimates 4-6 % for long term cap gains. How do I estimate using the number of shares I own, value of my holding, etc.

Thanks.
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Old 10-31-2020, 05:19 PM   #38
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Can you give me an example of how this is calculated mathematically? I have an American fund that estimates 4-6 % for long term cap gains. How do I estimate using the number of shares I own, value of my holding, etc.

Thanks.
I got that number directly from Vanguard at https://investor.vanguard.com/mutual...ibutions/vpmax. The math behind it is the $11.51 realized capital gain as of 9/30/2020 divided by the closing price of $148.12 on that same day.

It doesn't matter how many shares you own. If you owned 100 shares, it would be 1151/14812. 1000 shares is 11510/148120. 7.77% no matter what.

If you want to see what your personal distribution % is based on original purchase price (basis), you would divide $11.51 by whatever price per share you bought it at, but it doesn't really make sense to tell others it's returning a 15% distribution on capital gains just because your shares doubled over time, because that's pretty meaningless to anyone else.
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Old 10-31-2020, 05:24 PM   #39
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Can you give me an example of how this is calculated mathematically? I have an American fund that estimates 4-6 % for long term cap gains. How do I estimate using the number of shares I own, value of my holding, etc.

Thanks.
Most fund companies estimate $ per share. In your case, perhaps they based it on the share price for a given day and gave the date. Then you can calculate 4-6% of that day’s share price and multiply by the number of shares you own. Otherwise, calculate 4-6% of your total holdings in the fund.
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Old 11-01-2020, 09:42 AM   #40
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Thanks RunningBum and Audreyh1.

I’ve got some calculating to do. Very close to the cut off of not having to pay Cap gains tax. If it is expected to be more than last year I need to adjust our deferred Comp holdings now for taking effect in December to keep us there.
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