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TLH with Vanguard

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  • TLH with Vanguard

    This is probably a simple question but I can't find anywhere that addresses it after a brief search. I would like to start to TLH this year now that my AA is locked in and I feel like I have a grasp for what I need to do. I understand that to avoid a wash sale, you cannot buy or sell shares in identical funds within 30 days. This could happen "on accident" if you have an account within the portfolio that automatically reinvests dividends, so you want to turn this off. I've been able to direct dividends to a money market settlement account for all of my accounts within Vanguard and Fidelity except for the VG Roth IRA. It will only allow me to direct the funds to a bank, or to another fund already within the Roth IRA portfolio (ex. the previous Target 2050 fund.

    For those that Tax Loss Harvest and have a Vanguard Roth IRA: is there a way for me to direct the dividends to a money market settlement fund so that I can manually re-invest them when safe to avoid a wash sale or am I required to put it into some other fund? I'd just rather things simple if possible.

    I haven't called Vanguard yet (keep forgetting during business hours) but figured you all would have some experience here as well. Thanks in advance!

  • #2
    Yes you can open money market fund.
    By different funds that are in your taxable account.
    Or generate a wash sale to cover the dividends that were reinvested.
    This would have to be self-reported as Vanguard does not monitor your accounts.


    • #3
      Thanks. I am going through the options and I guess the one you are suggesting means I should transfer funds from VTSAX to a money market fund? I see that the minimum is $3,000 for the Federal and Prime MM accounts. Will it be a problem if I transfer 3k there for a few days then transfer it back to VTSAX and leave it with a balance of zero?

      Is there also a reason that this account wouldn't have the (settlement fund) moniker that the other MM accounts in my other accounts?