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Level 3
posted May 2, 2023 7:44:12 AM

Does selling and buying an identical ETF stock trigger a taxable event (capital gains)?

I would like to sell QQQ and buy QQQM. These ETFs are identical except one has a lower expense fee.  Will this trigger a taxable event for capital gains?

 

If this doesn't trigger a taxable event, how do I prevent my broker (Vanguard) from putting the capital gain on my tax forms?

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1 Best answer
Level 15
May 2, 2023 7:50:30 AM

@Matt18 wrote:

I would like to sell QQQ and buy QQQM. These ETFs are identical except one has a lower expense fee.  Will this trigger a taxable event for capital gains?

Yes. Even selling QQQ and then buying QQQ would trigger a taxable event for the purposes of calculating a capital gain.

 

Note that a loss would result in wash sale treatment (i.e., a loss would not be immediately recognized).

 

 

1 Replies
Level 15
May 2, 2023 7:50:30 AM

@Matt18 wrote:

I would like to sell QQQ and buy QQQM. These ETFs are identical except one has a lower expense fee.  Will this trigger a taxable event for capital gains?

Yes. Even selling QQQ and then buying QQQ would trigger a taxable event for the purposes of calculating a capital gain.

 

Note that a loss would result in wash sale treatment (i.e., a loss would not be immediately recognized).