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Tax Loss Harvesting - Vanguard Wellington
Old 11-21-2022, 11:41 AM   #1
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Tax Loss Harvesting - Vanguard Wellington

Before this year is out I plan to sell six figures worth of selected Wellington shares in a taxable account that will generate a loss.

Rather than park those proceeds in my settlement account for 4-6 months before I need them for a home purchase, what would be an equivalent fund(s) or ETF that I could move the funds to the same day without causing a wash sale?
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Old 11-21-2022, 11:47 AM   #2
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Have you evaluated the whole picture to see if holding the shares until you need to sell might be better?

Would the tax loss this year offset LTCG, STCG, some OI, or a mix?

Another approach might be simply to sell the shares now, wait 31 days, then re-buy.

I'm guessing that fund will have dividends in December. If you have dividend reinvestment turned on, that might result in a partial wash sale. Not a big recordkeeping deal if you only hold covered shares, but the loss you're hoping to book might be deferred.
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Old 11-21-2022, 11:53 AM   #3
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So you're looking at parking this money substantially in equities for just 4-6 months? I am near the end of a similar scenario, building a house, and I moved the house money out of equities and into ultra-short bond funds immediately when we made the house commitment. I would have been a pretty sick puppy had we still been in equities going into this year. YMMV, of course.
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Old 11-21-2022, 11:56 AM   #4
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Originally Posted by SecondCor521 View Post
Have you evaluated the whole picture to see if holding the shares until you need to sell might be better?

Would the tax loss this year offset LTCG, STCG, some OI, or a mix?

Another approach might be simply to sell the shares now, wait 31 days, then re-buy.

I'm guessing that fund will have dividends in December. If you have dividend reinvestment turned on, that might result in a partial wash sale. Not a big recordkeeping deal if you only hold covered shares, but the loss you're hoping to book might be deferred.
Yes, this would be to offset other LTCG's.
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Old 11-21-2022, 11:58 AM   #5
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So you're looking at parking this money substantially in equities for just 4-6 months? I am near the end of a similar scenario, building a house, and I moved the house money out of equities and into ultra-short bond funds immediately when we made the house commitment. I would have been a pretty sick puppy had we still been in equities going into this year. YMMV, of course.
Or what you did
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Old 11-21-2022, 01:09 PM   #6
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Originally Posted by Looking4Ward View Post
Before this year is out I plan to sell six figures worth of selected Wellington shares in a taxable account that will generate a loss.

Rather than park those proceeds in my settlement account for 4-6 months before I need them for a home purchase, what would be an equivalent fund(s) or ETF that I could move the funds to the same day without causing a wash sale?
Buy Treasuries for the time you need the money.
Since you need the money for a home purchase, it would be risky to buy any stocks, what if the market has a sudden 20% drop in 3 months and stays down for many months...
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Old 11-22-2022, 06:09 AM   #7
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Buy Treasuries for the time you need the money.
+100

Money needed in a few months should not be in equities or bond funds.
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Old 11-22-2022, 11:28 AM   #8
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Buy Treasuries for the time you need the money.
Since you need the money for a home purchase, it would be risky to buy any stocks, what if the market has a sudden 20% drop in 3 months and stays down for many months...
Would putting the funds into 3 or 6 month Treasury Bills be a good move?
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Old 11-22-2022, 11:30 AM   #9
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Would putting the funds into 3 or 6 month Treasury Bills be a good move?
Yes, but plan on holding it to maturity. If you need the money in 4-6 months, I wouldn't buy a 6 month bill.
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Old 11-22-2022, 11:39 AM   #10
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Yes, but plan on holding it to maturity. If you need the money in 4-6 months, I wouldn't buy a 6 month bill.
Understood. Thanks!
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Old 11-22-2022, 12:29 PM   #11
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You can get a brokered CD that matures in 3 months paying 4% interest. 4.5% for a 6 month CD. At Vanguard/Fido/Schwab.
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Old 11-22-2022, 12:32 PM   #12
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You can get a brokered CD that matures in 3 months paying 4% interest. 4.5% for a 6 month CD. At Vanguard/Fido/Schwab.
Thanks!
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Old 11-22-2022, 12:35 PM   #13
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Thanks!
Start here:
https://investor.vanguard.com/investment-products/cds

Click the View detailed CD quotes, login and go from there!
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