Should I realize a STCL or LTCL?

Home Fairmark Forum Taxation of Investments Should I realize a STCL or LTCL?

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  • #77413
    Hootz
    Participant

    I am going to sell 1/2 of my position in Vanguard High-Yield Muni Bond Fund. The lot that I will sell was purchased on 1/28/2021. If I sell it in the next few days, I will realize a STCL. If I wait a few more days, I will have a LTCL. In 2022, I will have dividends from Vanguard Mid-Cap Index and Vanguard Total Stock Market Index. I do not believe that either pays a capital gain distribution. However, I do own Vanguard Dividend Growth and Vanguard Health Care Fund in my taxable account, both which historically pay short-term capital gains and long-term-capital gains in excess of the loss that I am looking to realize in Vanguard High-Yield Tax-Exempt fund. Is it more beneficial for me to realize a STCL or LTCL?

    Thank you.

    • This topic was modified 8 months, 1 week ago by Kaye Thomas.
    #77415
    Kaye Thomas
    Moderator

    The tax benefit you get from STCL is as good as LTCL, sometimes better. You don’t necessarily get a better result with STCL (depends on what else appears on your tax return) but you never get a worse one, so if you’re in a situation where you’re indifferent as to when to sell, make it before the anniversary date so you have STCL.

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