Good morning. Thank you for your assistance in helping me understand the process better.
I have capital gains from other mutual fund distributions that I am trying to offset with some capital losses. My plan was to exchange some of my VWLUX (vanguard long term tax exempt) where i have a position for some time and some long term capital losses with VWLAX (high yield tax exempt) where i hold a position more recently. While i just switched off dividend/capital gain distributions planning to do this, i see there was a small dividend reinvestment on Nov 30 in VWLUX. Unfortunately 30 days from that falls on this weekend so i suspect if i sell some of my longer holdings in VWLUX by the end of this week i would be stuck with wash sale for that small automatic purchase. I have turned on sale by specific ID rather than average cost yesterday. Can someone explain what steps I should take to minimize or cancel out the wash sale?
1. Sell say 20-25K of long term VWLUX and then the following day, allot the sale to the most expensive lots AND the small recent lot that was automatically bought Nov 30
Or 2. Sell the same 20-25K of VWLUX, and just pick the most expensive lots ignoring the short term Nov 30 purchase. If so will the wash sale only reduce my capital loss by the amount of wash sale (its a couple of hundreds so small) or will it negate all of my capital loss in some way (i dont think so from my reading but wanted to check) and does this make it messy with the vanguard 1099s?
I simultaneously plan to buy the same amount of VWALX (via the vanguard website exchange method). I presume whether exchanging in one go or buying and selling over two days wont affect the way wash sale is calculated. And I understand VWALX has some AMT but i dont think it will affect me until i have a very large holding.
Thank you for your time during the holidays.
I have capital gains from other mutual fund distributions that I am trying to offset with some capital losses. My plan was to exchange some of my VWLUX (vanguard long term tax exempt) where i have a position for some time and some long term capital losses with VWLAX (high yield tax exempt) where i hold a position more recently. While i just switched off dividend/capital gain distributions planning to do this, i see there was a small dividend reinvestment on Nov 30 in VWLUX. Unfortunately 30 days from that falls on this weekend so i suspect if i sell some of my longer holdings in VWLUX by the end of this week i would be stuck with wash sale for that small automatic purchase. I have turned on sale by specific ID rather than average cost yesterday. Can someone explain what steps I should take to minimize or cancel out the wash sale?
1. Sell say 20-25K of long term VWLUX and then the following day, allot the sale to the most expensive lots AND the small recent lot that was automatically bought Nov 30
Or 2. Sell the same 20-25K of VWLUX, and just pick the most expensive lots ignoring the short term Nov 30 purchase. If so will the wash sale only reduce my capital loss by the amount of wash sale (its a couple of hundreds so small) or will it negate all of my capital loss in some way (i dont think so from my reading but wanted to check) and does this make it messy with the vanguard 1099s?
I simultaneously plan to buy the same amount of VWALX (via the vanguard website exchange method). I presume whether exchanging in one go or buying and selling over two days wont affect the way wash sale is calculated. And I understand VWALX has some AMT but i dont think it will affect me until i have a very large holding.
Thank you for your time during the holidays.
Statistics: Posted by Tryingtogetbetter — Tue Dec 26, 2023 10:50 am — Replies 0 — Views 18
