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Year end tax question

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  • Drop it into MD Drop it into MD 
    Participant
    Status: Physician
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    Joined: 09/20/2018
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    I am selling a house and will be able to direct about 50K of the proceeds to start a brokerage account.  Per my desired AA I will be buying VTSAX.  My question is I will be getting these funds very close to the end of the year.  Is there any advantage to rushing to get this money into my vanguard account prior to the year end?  I have no desire to time the market and want to just shuttle the money in when I get it but would there be some benefit to waiting a week for tax or other purpose that I have not thought of?    Other then 1 less tax form to fill out for 2018.

    Thanks for the help!

     

    Also I imagine as soon as I do this the market will tank.  So be prepared to get some cheap stock!

    #172253 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2461
    Joined: 03/01/2018

    you get the q4 dividend if you own it at the appropriate date, if that matters to you. that is taxable in 2018

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

    #172260 Reply
    jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016
    Also I imagine as soon as I do this the market will tank.  So be prepared to get some cheap stock!

    Click to expand…

    I LOL at this. Will be on the lookout.

    I think your question is a good one – so many tax-timing issues at the eoy, why not this? However, I can think of no reason it will benefit you to invest before the end of the year, other than that the market is up, on average, 7 out of every 10 days. In the short term, however, even that statistic is irrelevant.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #172262 Reply
    Drop it into MD Drop it into MD 
    Participant
    Status: Physician
    Posts: 440
    Joined: 09/20/2018

    you get the q4 dividend if you own it at the appropriate date, if that matters to you. that is taxable in 2018

    Click to expand…

    I am not sure what the ex-dividend date is for VTSAX this month but my understanding is that getting in right before it does not help you very much and may actually hurt slightly due to taxes.  I realize this is a very small amount we are talking about.  Anyways if I were to get funds in this year it would likely be after anyways because I will not have them until at least the 24th.

    #172274 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3567
    Joined: 01/14/2017

    Capital gains distributions can theoretically affect you but with VTSAX I think that’s a relative non-issue.

    #172298 Reply

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