We are in similar but slightly different boats. Perhaps we can learn together but please confirm to be sure. I had turned off automatic reinvestment in my taxable account yrs ago perhaps because I didn’t want to have your problem. I sold some lots with losses last week and reinvested in a different fund. I thought I was home free. Belatedly I remembered that some time ago I had switched a high cost fund in my TIRA to the same low cost fund I had tax loss harvested. Since I was not thinking of harvesting losses at that time, I had distributions automatically reinvested in the IRA. This is a similar sin to what you are contemplating…………selling something for a loss and then within 30 days before or after the sale buying the same fund.
My current thinking is this……..it is a wash sale and has the potential to negate the tax loss harvest you want. The good thing is that since you bought only a part of what you are selling (I assume) , it is a partial wash sale and only negates part of that tax loss that you are thinking about. In crude terms, if you have 100 shares that you hold at a loss
and they generated a 10% distribution, you would have reinvested in 10 shares. If you then sell the 100 shares You then have a partial wash sale of 10 shares but would still have the loss on 90 shares. The loss that was negated by the wash sale is not gone forever for you. It is added to your basis on some set of shares so your gain in the future will be less (or loss will be greater).
Google for wash sale and then after you get that google for partial wash sale. As I said I’m still wrestling with this beast so best to wrestle yourself too.
has some examples of wash sales. If the link doesn’t get you directly there go the index at the very end and look for wash sales.
- This reply was modified 2 years, 9 months ago by kaneohe.