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newbie TLH mistake… (facepalm)

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  •  RogerRovers 
    Participant
    Status: Physician
    Posts: 8
    Joined: 02/01/2017
    WCICon18

    First time TLH’ing this past December. Thought I’d share my personal silly mistake/oversight, in case anyone else has had something similar happen to them before.

    Had almost all of my taxable account in VTSAX, and decided to TLH into VFIAX. I did this transaction Dec 19, 2018. Turns out, VTSAX’s dividend distribution record date is 12/20/2018, while VFIAX’s is 12/13/2018. So… I missed out on both VTSAX’s (1 day too early) and VFIAX’s (6 days too late) quarterly dividend distribution. Obviously not a big deal, but works out to missing out on approx 0.5% distribution of my total brokerage account value.

    Oh well, lesson learned. In the future when TLH’ing, take a quick peek at dividend dates; sometimes holding off for just a day or two can make a difference, especially mid/end of December.

    #180425 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2409
    Joined: 01/08/2016

    you should be prorated VTSAX.

    yes obviously buying after a dividend you dont get anything, but this is actually encouraged.

    #180429 Reply
    Liked by Zaphod
     jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
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    Joined: 03/01/2018
    you should be prorated VTSAX.

    Click to expand…

    ?

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #180434 Reply
     Peds 
    Participant
    Status: Physician
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    Joined: 01/08/2016

    no? then nothing ;(

    #180442 Reply
     jacoavlu 
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    Status: Physician, Small Business Owner
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    Joined: 03/01/2018

    what do you mean by “you should be prorated VTSAX” ?

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #180445 Reply
     RogerRovers 
    Participant
    Status: Physician
    Posts: 8
    Joined: 02/01/2017

    I think that bond funds offer a prorated share of distributions if you sell early… However I don’t think that’s true of stock funds.  Would love to be proven wrong though

    #180453 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2409
    Joined: 01/08/2016

    what do you mean by “you should be prorated VTSAX” ?

    Click to expand…

    dont you get the value of the distribution as part of the sale? so the OP didnt completely lose out.

    #180454 Reply
     jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 1498
    Joined: 03/01/2018

    you either get the dividend, or you don’t, nothing is prorated the way it is with funds that declare dividends daily

    I think you have to own the shares on the record date but I’ve never tried to understand all that stuff

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #180461 Reply
    Liked by Peds
     bean1970 
    Participant
    Status: Physician
    Posts: 357
    Joined: 07/12/2017

    The other thing to note is whether the dates of selling change any dividends you made already that year from qualified to non-qualified.  For many of us…that would change the taxation from 23% to 37%…..   I would much prefer to make money taxed at 23% than taxed at 37%.

    #180473 Reply

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