Tax Loss Harvesting: Same with ETF's as MF's?

[MercyMe]

If one were to TLH from one mutual fund to another, the ideal time to do this is selling the held MF before the ex-dividend date and buying the TLH partner after the ex-dividend date.

Is this equally true for tax loss harvesting ETF's?

[VanWinkle]

Yes it is the same as Capital gains/losses are handled the same way. If the mutual funds in question are throwing off dividends, then the timing should be also related the the dates needed to make the dividends qualified.

From Fidelity:

All of the following requirements must be met:

"The fund must have held the security unhedged for at least 61 days out of the 121-day period that began 60 days before the security’s ex-dividend date. (The ex-dividend date is the date after the dividend has been paid and processed and any new buyers would be eligible for future dividends.)

For certain preferred stock, the security must be held for 91 days out of the 181-day period, beginning 90 days before the ex-dividend date. The amount received by the fund from that dividend-generating security must have been subsequently distributed to you.

You must have held the applicable share of the fund for at least 61 days out of the 121-day period that began 60 days before the fund’s ex-dividend date."

[MercyMe]

Quote:

Originally Posted by VanWinkle Yes it is the same as Capital gains/losses are handled the same way. If the mutual funds in question are throwing off dividends, then the timing should be also related the the dates needed to make the dividends qualified. From Fidelity: All of the following requirements must be met: "The fund must have held the security unhedged for at least 61 days out of the 121-day period that began 60 days before the security’s ex-dividend date. (The ex-dividend date is the date after the dividend has been paid and processed and any new buyers would be eligible for future dividends.) For certain preferred stock, the security must be held for 91 days out of the 181-day period, beginning 90 days before the ex-dividend date. The amount received by the fund from that dividend-generating security must have been subsequently distributed to you. You must have held the applicable share of the fund for at least 61 days out of the 121-day period that began 60 days before the fund’s ex-dividend date."

I've seen that on Fido's website but honestly I need a caveman version of it to know what it means. I'm just not that bright these days.

[TheWizard]

Quote:

Originally Posted by MercyMe I've seen that on Fido's website but honestly I need a caveman version of it to know what it means. I'm just not that bright these days.

Don't worry about it.
It just relates to what portion of your dividends will be "ordinary" vs "qualified".
Your brokerage will report the proper numbers on your tax form for the year...

[VanWinkle]

Quote:

Originally Posted by MercyMe I've seen that on Fido's website but honestly I need a caveman version of it to know what it means. I'm just not that bright these days.

It mainly means there are a lot of unqualified dividends being claimed as
qualified every year as they are not distinguished by the brokerage based
on the time owned qualification.

VW

[TheWizard]

Quote:

Originally Posted by VanWinkle It mainly means there are a lot of unqualified dividends being claimed as qualified every year as they are not distinguished by the brokerage based on the time owned qualification. VW

That's fine with me.
Don't tell the IRS...

[VanWinkle]

Quote:

Originally Posted by TheWizard That's fine with me. Don't tell the IRS...

True be dat!!!