BACKGROUND: I am going to do tax loss harvesting in order to rebalance and reallocation my portfolio. My plan is to migrate my allocation more toward my tax-exempt bond fund (CA Intermediate Bond Fund), as I am in the 22% (moving to the 24%) tax bracket and 9.3% bracket in Calif. I am in the 15% CG bracket. I will also use the loss in my Total bond fund to "cover" the gains that I will take when I sell some of my equity stock, avoiding taxes, and reinvesting the proceeds from my equity position in my CA Int Bond fund, as well.
Most of my shares of Total Bond Fund have losses. Some lots have declined in value more than others. I figure that I will keep a portion of my Total Bond Fund shares (i.e., I am not liquidating my entire Total Bond Fund position and am keeping a portion to provide some balance in my portfolio). It is possible that I could sell more shares in the future but my approach has always been to buy and hold shares and not sell. I can't remember the last time I sold shares of any investment other than in my early, pre Bogle years.
QUESTION FOR DISCUSSION: What are the benefits and downsides of selling shares that have the largest percent losses first (or vice versa), leaving the shares that have less losses in my Total Bond Fund?
I looked at the min Tax approach and could follow that approach (that identifies which shares to sell first https://investor.vanguard.com/investor- ... 3060fc6dda) or I could sell specific lots first.
I am just a bit lost as to which lots to sell and the implications of that decision.
Thanks for any input.
Most of my shares of Total Bond Fund have losses. Some lots have declined in value more than others. I figure that I will keep a portion of my Total Bond Fund shares (i.e., I am not liquidating my entire Total Bond Fund position and am keeping a portion to provide some balance in my portfolio). It is possible that I could sell more shares in the future but my approach has always been to buy and hold shares and not sell. I can't remember the last time I sold shares of any investment other than in my early, pre Bogle years.
QUESTION FOR DISCUSSION: What are the benefits and downsides of selling shares that have the largest percent losses first (or vice versa), leaving the shares that have less losses in my Total Bond Fund?
I looked at the min Tax approach and could follow that approach (that identifies which shares to sell first https://investor.vanguard.com/investor- ... 3060fc6dda) or I could sell specific lots first.
I am just a bit lost as to which lots to sell and the implications of that decision.
Thanks for any input.
Statistics: Posted by jseagull — Tue Oct 22, 2024 8:36 pm — Replies 5 — Views 348