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DeluxeXL t1_j2a7edt wrote

A proper TLH swaps among a pair of similar but not identical funds, so being out of market isn't an issue. However, if you have suboptimal substitute, you can be stuck with it (e.g. going from total stock to S&P 500 and being stuck with it, reducing your holdings from 4000 to 500.

If you tax loss harvest (TLH) while you are in a low tax bracket, you don't save much tax.

If you TLH, your new cost basis is lower, and you reset holding period to short term. Therefore, you might find rebalancing more expensive in the next 12 months.

Also, it can be easy to mess up a TLH with wash sale if you have the same pair of funds in multiple accounts or have DRIP on.

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RealAustinNative OP t1_j2amk6o wrote

This would be identical holdings (VTSAX) in the old and new account for this money. If I wait 30 days do I avoid a wash sale?

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DeluxeXL t1_j2anu17 wrote

> This would be identical holdings (VTSAX) in the old and new account for this money. If I wait 30 days do I avoid a wash sale?

Yes. You can buy on the 31st day.

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