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Ex-dividend, record and payable dates for ETF: confused ...
Old 12-20-2020, 05:48 PM   #1
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Ex-dividend, record and payable dates for ETF: confused ...

Yet another almost-clueless question:


In March I did some capital loss harvesting to simplify my holdings at Vanguard. I still have about $14,400 in realized capital loss from March, so I now want to sell my VTV position (about $13,300 in long term cap gains) to continue re-balancing/simplifying.

I'm a bit unsure about the timing of the sale. The VTV declaration date is 12/22, the ex-dividend date is 12/24, the record date is 12/28, and the payable date is 12/30.

So, if I understand this: I should wait until 12/29 to sell the VTV in order to get the dividend (to be an "owner" on the record date)? And then, selling on 12/29 I will have nicely "used up" most of my March realized losses -- with some realized loss still available to offset December cap gains in my other holdings?

And, though I will sell on 12/29, it really doesn't matter if I quickly buy my new bond holding on 12/30, or wait until early January?


Thanks in advance for the coaching, as usual!
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Old 12-20-2020, 06:07 PM   #2
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If this is taxable, you probably want to sell before the record date to avoid the distribution. Just in case the distribution is not all long-term cap gains.

You aren’t going to lose out on any dividend as the price of the security will drop on the ex-div date to reflect all distributions including the dividend.
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Old 12-20-2020, 06:30 PM   #3
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Thanks, @audrey1. This is an ETF, so I don't think there will be capital gains distributions.

The table at https://advisors.vanguard.com/iwe/pdf/taxcenter/FAFYEEST.pdf says for VTV net income available $0.74 (which I assume is dividend per share) and $0 for estimated cap gains.

Perhaps I'm not understanding the table correctly. And yes, this is in a taxable account with 500 shares of VTV, all of which I intend to dump in the name of simplicity (and better AA). So it may throw about $375-ish in dividends, right?
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Old 12-20-2020, 06:35 PM   #4
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Do you intend to do something with the dividend money? If not, the ETF prior to the dividend will be the same value as the (ETF + the dividend) after the dividend.
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Old 12-20-2020, 06:40 PM   #5
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Do you intend to do something with the dividend money? If not, the ETF prior to the dividend will be the same value as the (ETF + the dividend) after the dividend.

This is in my taxable account, so I have dividends deposited into my sweep account rather than re-invested. So it will be taxed at, say, 20%.

Specific plans? I'd buy more of my new position with the after-tax $300-ish.

We're not taking about a huge sum here, so I really can't make a horrible mistake by selling anytime before the end of the year -- but I'd sure like to feel confident that I know how this works!
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Old 12-20-2020, 06:43 PM   #6
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Then it really doesn't matter, since that table also shows 100% of the dividend is qualified. If you sell before, the sell price is a little higher in anticipation of the dividend to be paid. If you sell after, the price is reduced by that $.74 per share. The only difference will be market changes.

I should qualify that. It can matter, in some cases. I didn't realize it at the time, but in the first quarter this year, I sold VTCLX just before the dividend, and bought VFIAX after it's dividend. It was a pretty substantial amount too. So I skipped a good sized dividend in March. That money isn't gone, I got a little more on the sale, and paid a little less on the purchase, and since I have a capital loss for the year, it results in less taxable income, and a larger subsidy. Or more room for Roth conversion. Worked out well for me.
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Old 12-20-2020, 06:45 PM   #7
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If it were me, I’d sell it tomorrow, December 21, and be done with it.
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Old 12-20-2020, 06:53 PM   #8
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Then it really doesn't matter, since that table also shows 100% of the dividend is qualified. If you sell before, the sell price is a little higher in anticipation of the dividend to be paid. If you sell after, the price is reduced by that $.74 per share. The only difference will be market changes.

I should qualify that. It can matter, in some cases. I didn't realize it at the time, but in the first quarter this year, I sold VTCLX just before the dividend, and bought VFIAX after it's dividend. It was a pretty substantial amount too. So I skipped a good sized dividend in March. That money isn't gone, I got a little more on the sale, and paid a little less on the purchase, and since I have a capital loss for the year, it results in less taxable income, and a larger subsidy. Or more room for Roth conversion. Worked out well for me.

So, just to make sure I follow: Suppose I sell the VTV on 12/21, well before the record date of 12/28. I will not get a VTV dividend at year's end

If I then turn around and on 12/22 buy, say, 500 shares of VTI, which has a record date of 12/28, I would receive the end-of-year VTI dividend on those 500 brand new shares?

If that's right, then I have a glimmer of understanding how this works...
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Old 12-20-2020, 06:58 PM   #9
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So, just to make sure I follow: Suppose I sell the VTV on 12/21, well before the record date of 12/28. I will not get a VTV dividend at year's end

If I then turn around and on 12/22 buy, say, 500 shares of VTI, which has a record date of 12/28, I would receive the end-of-year VTI dividend on those 500 brand new shares?

If that's right, then I have a glimmer of understanding how this works...
Yes, that sounds right.
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Old 12-20-2020, 07:00 PM   #10
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https://www.investor.gov/introductio...tled-stock-and
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Old 12-20-2020, 07:02 PM   #11
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It seems like, at this point, I should say "Thanks, coaches!"

My modest goal is to learn a bit more each year, and to do fewer dumb things each year. This forum is a great help for that.
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