Reply To: Loss on Vanguard High-Yield Tax-Exempt Fund held 6 months or less

Home Fairmark Forum Taxation of Investments Loss on Vanguard High-Yield Tax-Exempt Fund held 6 months or less Reply To: Loss on Vanguard High-Yield Tax-Exempt Fund held 6 months or less

#1971
Kaye Thomas
Moderator

Yes, that’s correct. I’ll add this information to our guidance on this rule. Here’s the language from Internal Revenue Code section 852(b)(4)(E)(i):

Except as otherwise provided by regulations, subparagraph (B) [the loss reduction rule] shall not apply with respect to a regular dividend paid by a regulated investment company which declares exempt-interest dividends on a daily basis in an amount equal to at least 90 percent of its net tax-exempt interest and distributes such dividends on a monthly or more frequent basis.

  • This reply was modified 2 years, 8 months ago by Kaye Thomas.