RogerRoversParticipantStatus: PhysicianPosts: 8Joined: 02/01/2017
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.January 11, 2019 at 8:32 am MST #180425
you should be prorated VTSAX.
yes obviously buying after a dividend you dont get anything, but this is actually encouraged.you should be prorated VTSAX.Click to expand…
?January 11, 2019 at 8:40 am MST #180434January 11, 2019 at 8:51 am MST #180442
what do you mean by “you should be prorated VTSAX” ?January 11, 2019 at 8:52 am MST #180445RogerRoversParticipantStatus: PhysicianPosts: 8Joined: 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 thoughJanuary 11, 2019 at 8:58 am MST #180453
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.January 11, 2019 at 8:58 am MST #180454
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 stuffbean1970ParticipantStatus: PhysicianPosts: 357Joined: 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%.January 11, 2019 at 9:32 am MST #180473