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Teemoe
Level 3
July 27, 2022
Question

Do I risk a wash sale if I completely sell a Vanguard Target Date Fund in a taxable Vanguard account then purchase back its exact index fund components?

  • July 27, 2022
  • 1 reply
  • 25 views
I want the same asset allocation and the same index funds but have been advised it is smarter, tax-wise, to hold the index funds separately instead of holding them in a target date fund.  I realize I will have to do the rebalancing myself now.

1 reply

Level 3
LaceyLLevel 3
Level 3
July 27, 2022

If you sell a mutual fund and then buy the stock components of that same fund, that may be considered a wash sale, it would depend on how closely your purchases match the fund you are replacing.  If it is almost substantially the same, it would be considered a wash sale. 

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