Personal Investments • Question about 61-day dividend and wash sale timing

I have new shares of VTI (Vanguard Total Stock Market Index Fund) in a taxable brokerage that I want to replace with VFIAX (Vanguard 500 Index Fund). (The account already has old shares of VFIAX with low basis, and having both VFIAX and VTI complicates things.) I have questions about the 61-day dividend rule and wash sales.

Taxable Brokerage Account history:
03/07/24 – Bought VTI (Lot 1)
03/27/24 – Dividend received
04/12/24 – Bought VTI (Lot 2)
04/19/24 – Bought VTI (Lot3)

Question 1: In order to keep the March 27 dividends as “qualified” I believe I must hold the Lot 1 shares for 61 days, is that correct? Is that 61 days calculated from the “trade date” not the “settled date” which was 03/09? If “yes” to both questions, I conclude that May 8 as the soonest I could sell these shares.

Currently Lots 1 and 2 have unrealized losses and Lot 3 has a small gain. I want to replace the VTI with VFIAX, so I’d like to sell all 3 lots--which is the entirety of our VTI holdings in this brokerage account--and will result in a net capital loss. We also hold VTI in our Roth IRA accounts. All the Roth purchase dates are more than 30 days prior to my anticipated sell-date of May 8, so I don’t think a wash sale is involved there.

Question 2: Do I also need to make sure that these taxable VTI shares are sold more than 30 days before the next dividend date (06/28/24) when dividends are reinvested in our Roth VTI?

Question 3: Can I sell all 3 lots of VTI in the taxable brokerage account on May 8 (or later) and not incur a wash sale? Do the trade dates for Lot 2 and Lot 3 matter?

Roth 1 history:
02/07/24 – bought VTI
02/13/24 – bought VTI
03/27/24 – dividend received

Roth 2 history:
02/05/24 – bought VTI
03/27/24 – dividend received

Thanks in advance for the help!

Statistics: Posted by AJ 321 — Sat May 04, 2024 4:46 pm — Replies 0 — Views 103

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