|
Posted by Jim L. on January 13, 2008, 12:07 pm
JimLouis@webtv.net (Jim L.)
I intend to sell MGSEX at a loss and buy NAESX to replace it. (MGSEX is
a small-cap managed fund and NAESX is a small-cap index fund).
Would that be considered a "wash sale"--- should I wait 31 days before
buying NAESX?
|
|
Posted by joetaxpayer on January 13, 2008, 4:03 pm
Jim L. wrote:
> JimLouis@webtv.net (Jim L.)
> I intend to sell MGSEX at a loss and buy NAESX to replace it. (MGSEX is
> a small-cap managed fund and NAESX is a small-cap index fund).
>
> Would that be considered a "wash sale"--- should I wait 31 days before
> buying NAESX?
They both appear in the same Morningstar style box (small cap blend) but
that's about where the similarity ends.
To see if there's any chance of 'wash' claim, I looked at the top
holdings. The top ten holdings in the Vanguard index contains 2.69% od
assets, for the managed fund, 14.81%. Even then, only one stock was on
both lists. I am 100% certain you have no wash risk here.
The IRS, from what I've seen (or rather not seen) hasn't spelled out the
criteria for two different funds counting the same for purposes of the
wash sale rule. I'd hazard to say two index funds based on precisely the
same index does run afoul, but your two funds are not even close.
JOE
www.blog.joetaxpayer.com
|
|
Posted by d. on January 13, 2008, 4:25 pm
JimLouis@webtv.net (Jim L.) wrote:
>JimLouis@webtv.net (Jim L.)
>I intend to sell MGSEX at a loss and buy NAESX to replace it. (MGSEX is
>a small-cap managed fund and NAESX is a small-cap index fund).
>
>Would that be considered a "wash sale"--- should I wait 31 days before
>buying NAESX?
>
No. They are not substantially the same security.
|
|
Posted by Elle on January 14, 2008, 12:42 pm
I think the discussion at the following two sites, among
others, supports Joe's and d's claims that the IRS would
likely say (if asked) that you were not in violation of the
Wash Sale rules:
http://www.fairmark.com/capgain/wash/wsident.htm . See the
section titled "Mutual Funds."
http://www.bankrate.com/brm/itax/tips/20030114a.asp
|
|
Posted by joetaxpayer on January 14, 2008, 3:03 pm
Elle wrote:
>
> http://www.fairmark.com/capgain/wash/wsident.htm . See the
> section titled "Mutual Funds."
>
> http://www.bankrate.com/brm/itax/tips/20030114a.asp
Similar to the question regarding whether an IRA purchase can run afoul
of wash sale rules (it can, and the IRS just made a specific statement
to the point), I think the rules regarding 'substantially identical
securities' can use some clarification.
While I think I'm comfortable answering when to me it's clear the two
securities are not similar, there's a grey zone the IRS has not
addressed. I'd agree with Fairmark that two [cap weighted] S&P index
funds are similar, despite the small difference in expenses from one to
the other. But for grey; How about the Rydex equal weighted S&P (ticker
- RSP) vs the regular cap-weighted Indices? In one year, one fund has
outperformed the other by more than 5%. Is that enough to claim they are
different?
JOE
|
| Similar Threads | Posted | | Wash Rules /IRA | August 5, 2007, 3:33 pm |
| "Wash" sales | December 25, 2007, 3:28 pm |
| Short sale? | January 5, 2008, 6:57 am |
| short sale advise. | May 31, 2007, 1:22 pm |
| Munis: Sale of the Century? | October 22, 2008, 3:50 pm |
| Capital gains on land sale | October 14, 2007, 6:44 am |
| possible to get sale prices of condos in my building ? | November 1, 2007, 5:05 am |
| Duplex sale and residential exclusion | November 1, 2007, 1:36 pm |
| stock sale / Emergency Fund question. | May 28, 2008, 11:57 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap